The National Retail Federation, the National Industrial Transportation League, and others have filed a petition for rule making asking the Federal Maritime Commission (FMC) to clarify their position on detention and demurrage. The US shippers, truckers, and transportation intermediaries are requesting that the FMC consider policy that would prevent marine terminals and container lines from charging demurrage and detention fees when uncontrollable incidents prevent cargo from being picked up from ports on time.
In a petition filed with the FMC, the Coalition for Fair Port Practices stated that “recent events involving port congestion, labor strife, an ocean carrier bankruptcy, inclement weather and other disruption events have had crippling effects on US ports and the stakeholders who rely on the efficient movement of goods.” Cargo owners and trucking companies normally have a small window during which they can pick up containers free of charge. After that, they can be assessed a demurrage charge; a fee intended to ensure that containers are removed promptly. In addition, detention and per diem fees can be charged if cargo containers and chassis are not returned within a specified timeframe.
The fees are designed to discourage the use of terminals for long-term storage and to improve equipment utilization. However, ongoing congestion at US ports, paired with the bankruptcy of South Korea’s Hanjin Shipping, has led to a surge in disputes over demurrage and per-diem detention charges. In some circumstances, cargo owners and trucking companies have been hit with additional fees in excess of $1 million.
Members of the coalition filing the petition are asking FMC to adopt policies that would extend free days during times of port congestion,weather-related events, and other situations that are beyond the control of the parties picking up or returning containers and chassis. In addition, demurrage, detention, and per diem charges would be reevaluated on a situational basis.
Deringer will continue to monitor the situation and provide an update should the FMC make an official statement. For questions, or to further discuss the FMC petition, please contact Deringer’s Marketing Department.
