The Federal Maritime Commission announced this week that it is initiating an investigation into the demurrage and detention practices of some ocean carrier lines and marine terminal operators, especially in cases where shippers are not allowed to retrieve cargo.

The investigation, led by Commissioner Rebecca Dye, stems from a petition filed in December 2016 by the Coalition for Fair Port Practices, of which NITL is a member. The petition (Petition P4-16) asked the FMC to initiate a rulemaking proceeding to restrict the ability of steamship lines and marine terminal operators to impose detention and demurrage charges due to circumstances beyond shippers’ control.

Demurrage is assessed on cargo left at a terminal beyond allotted free time. Detention charges are levied for late return of carriers’ containers. The fees are designed to discourage the use of terminals for long-term storage and to improve equipment utilization.

In January, Don Pisano, a member of the NITL Board of Directors and former chair of NITL’s Ocean Transportation Committee, and Karyn Booth and Nick DiMichael, League counsel, joined other representatives from the Coalition for Fair Port Practices in testifying before the FMC on unfair demurrage and detention charges. The coalition representatives noted that unfair port charges have been levied more frequently in recent years as a result of labor strife, increasing freight volumes, the Hanjin bankruptcy, and weather emergencies.

In launching the investigation, Commissioner Dye ordered ocean common carriers and marine terminal operators to provide information and documents explaining their detention and demurrage practices. She also urged shippers, dray truck companies, and other affected parties that can document specific allegations and provide supporting materials of unreasonable port detention and demurrage practices and fees to step forward and cooperate with the investigation.

“We expect concerned parties to participate robustly in this investigation,” she said. “Their cooperation is essential.”

Correspondence, allegations, and supporting documents can be sent to the FMC by e-mail at [email protected]. The physical mailing address is as follows:
Commissioner Rebecca Dye
Federal Maritime Commission
800 North Capitol Street, N.W.
Washington, DC 20573

The National Industrial Transportation League is urging officials representing East and Gulf Coast ports and the International Longshoremen’s Association to return to the bargaining table and resume negotiating a new master contract covering the ports.

In a letter to Harold Daggett, president of the ILA, and David Adam, chairman and CEO of the U.S. Maritime Alliance, the League expressed its “deep concern” that the two parties had not yet agreed to resume talks, which broke down December 6 over a disagreement about automated terminals. The current master contract covering the ports will expire on September 30.

The letter, which was signed by NITL and more than 110 other transportation, retail, consumer, and trade organizations, notes that a contract extension would benefit all parties with a stake in port operations by providing them with the “certainty” they need to conduct business. But it also warns that failing to resume negotiations could prompt shippers and cargo owners to begin making plans to shift to West Coast ports, where the master contract will not expire until 2022.

“Supply chain disruptions arising out of previous contract negotiations are well documented,” the letter states. “Such disruptions can have enormous adverse economic impacts. For example, disruptions on the West Coast caused marked shifts in business operations that benefitted East and Gulf Coast ports. Much of that new business has stayed on the East and Gulf Coasts, but could just as easily shift back to West Coast gateways, where a long-term contract is in place.”

National Industrial Transportation League Executive Director Jennifer Hedrick issued the following statement in response to President Trump’s proposed infrastructure plan:

“The National Industrial Transportation League (NITL) applauds the efforts by the White House to improve our nation’s infrastructure, which can’t come soon enough for businesses moving freight. A more efficient freight supply chain is a critical component of businesses working to grow the U.S. economy, and ensures that our nation remains competitive within the global economy.”

The National Industrial Transportation League and the Transportation Intermediaries Association have revised their model broker-shipper contract and are making it available exclusively to NITL and TIA members.

The two organizations began updating the model contract in 2017, forming a small working group consisting of members of both organizations. Many of the updates are designed to address new federal regulations affecting the movement of food products, specifically the U.S. Food and Drug Administration’s final rule on the sanitary transportation of human and animal food. The rule took effect on 6 April 2017 for “larger” third-party logistics professionals (more than 500 employees) and will apply to “small businesses” as of 6 April 2018.

“Our respective organizations sought to integrate existing laws, regulations and legal interpretations and not place undue stress onto the other party,” says Jeff Tucker, CEO of Tucker Company Worldwide and chairman of NITL’s Highway Committee. “We’re pleased to provide this benefit to our members and our industry.”

Don Pisano, a member of the NITL Board of Directors and former chair of NITL’s Ocean Transportation Committee, and Karyn Booth and Nick DiMichael, League counsel, joined other representatives from a broad range of organizations earlier this week to urge the Federal Maritime Commission to restrict the ability of steamship lines and marine terminal operators to impose detention and demurrage charges due to circumstances beyond shippers’ control.

At hearings at FMC headquarters in Washington, D.C., the affected organizations, known collectively as the Coalition for Fair Port Practices, noted that unfair port charges have been levied more frequently in recent years as a result of labor strife, increasing freight volumes, the Hanjin bankruptcy, and weather emergencies.

Demurrage is assessed on cargo left at the terminal beyond allotted free time. Detention charges are levied for late return of carriers’ containers. The fees are designed to discourage the use of terminals for long-term storage and to improve equipment utilization.

In December 2016, the Coalition for Fair Port Practices filed a petition (Petition P4-16) with the FMC asking the agency to initiate a rulemaking proceeding on this matter. The FMC announced in November 2017 that it would hold hearings on the issue on January 16-17.

Former NITL President James Bartley passed away on Tuesday, December 19, 2017. NITL members and staff mourn his loss and recognize the many years of service Bartley provided to the League. His obituary may be found here.

NITL and its fellow members of the Coalition for Fair Port Practices are petitioning the Federal Maritime Commission to be allowed to testify before the FMC on what constitutes “just and reasonable rules and practices” with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.

“The Coalition commends the Federal Maritime Commission for its decision to schedule public hearings on the Coalition’s Petition for Rulemaking concerning demurrage and detention practices of ocean carriers and marine terminals applied during periods of port congestion or other circumstances impacting the accessibility of our nation’s seaports,” the petition states. “The Coalition appreciates the opportunity to explain the concerns of importers, exporters, and drayage operators who are assessed demurrage and/or detention/per diem when cargo cannot be delivered or equipment cannot be returned due to port congestion or other circumstances that are beyond their control.”

The Coalition for Fair Port Practices filed a petition (Petition P4-16) with the FMC in December 2016 asking the agency to initiate a rulemaking proceeding on this matter. The FMC announced on November 16 that it would hold hearings on this issue on January 16-17.

NITL and its fellow members of the Rail Customer Coalition (RCC) are urging the Surface Transportation Board and key lawmakers to remain vigilant about service problems affecting CSX customers and not simply assume that the railroad is improving operations across the board.

In the five weeks since the STB held a “listening session” to hear directly from shippers about the problems they are experiencing with CSX, service has only worsened in some areas served by the railroad, according to letters sent by the RCC to the STB and key members of Congress.

“With CSX closing additional yards since the listening session, rail customers remain very concerned about the resiliency of the rail network to meet customer demand now and into the future,” stated the letter to STB members Ann Begeman and Deb Miller. “The RCC would like to request a meeting with each of you to provide an update on continuing and in some cases deteriorating CSX service conditions, and to discuss actions the Board could take that would fix the underlying problems.”

The Federal Maritime Commission will hold hearings on January 16-17 in response to a petition filed by NITL and two dozen other groups that raised issues associated with detention, demurrage, and per diem charges.

The organizations, known collectively as the Coalition for Fair Port Practices, filed a petition (Petition P4-16) with the FMC in December 2016 asking the agency to initiate a rulemaking proceeding “to clarify what constitutes `just and reasonable rules and practices’ with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.”

Those interested in presenting testimony at the hearings must send their request to the FMC no later than Friday, December 8, 2017.

After a two-week delay caused by Hurricane Irma, a “listening session” called by the Surface Transportation Board took place Wednesday, October 11, with shippers providing example after example of CSX Railway service problems causing plant shutdowns and raising shipping costs.

NITL Chair Mary Pileggi, Executive Director Jennifer Hedrick, and General Counsel Karyn Booth attended the hearing, and Pileggi submitted comments on behalf of League members. The comments criticized CSX for failing to notify its customers of forthcoming operational changes and to coordinate those changes with its customers. The comments also noted that CSX will probably suffer little for its actions because it operates in “an oligopoly with many captive customers” rather than “a market that is robustly competitive”—a reference to the competitive switching rulemaking (EP 711) that is languishing before the STB.

CSX CEO Hunter Harrison addressed the Board and the session’s attendees, strongly defending his company’s strategy of “precision scheduled railroading” and attributing the service delays primarily to employees failing to implement the plan properly. The STB’s two commissioners, Acting Chair Ann Begeman and Vice Chair Deb Miller, asked Harrison questions during his hour-long remarks, including questions about his failure to participate in an industry work group that is collaborating on ways to help address Chicago rail traffic issues.

Read more information about the listening session here. Testimony from all session participants will be posted on the STB website in Docket EP 742.