US Shippers: Port Congestion-Driven Fees Are Unfair

U.S. importers and exporters claim that the demurrage and detention practices of marine terminal operators (MTOs) and vessel-operating common carriers (VOCCs) at the nation’s ports are unfair.

According to the US Federal Maritime Commission’s (FMC) latest report certain shippers paid over USD 100,000 in demurrage charges  last year, as compared to paying approximately USD 10,000 for the previous year.

The Commission started gathering information on the port congestion and its consequences in fall 2014 from the agency’s four congestion forums focusing on the issue of fees charged against importers and exporters.

The FMC voted on the report at a meeting held in Washington on April 13th. The agenda included discussion on congestion at US ports and major carrier alliances.

“I am hopeful that the report becomes a discussion paper among industry stakeholders and helps stimulate solutions to problems that have arisen as a result of the severe port congestion experienced in the last year. The report primarily frames the relevant issues, including: defining terms associated with the application of demurrage and detention rules; who controls the charges (e.g., carriers, Marine Terminal Operators or Port Authorities); and, potential actions that may be taken,” FMC Chairman Mario Cordero commented.

The disparity in fees over the last couple of years highlights shippers’ perceptions that demurrage charges are not serving to speed the movement of cargo, the purpose for which those charges had originally been intended, the report said.

“Shippers feel they are in a “catch-22” when they are not permitted to pick up their container because of MTO congestion, and yet are charged demurrage. Similarly, normal free-time periods may become insufficient when the MTO is unable or unwilling to provide shippers access to their cargo,” FMC said.

At the moment, FMC is pondering the course of action it may take and plans to continue revision of the issue as part of examination of port congestion.

The Commission proposed certain measures that might be taken in due course, including the establishment of an Advisory Committee under the Federal Advisory Committee Act; the imposition of special reporting requirements on filed agreements; the initiation of a non-adjudicatory fact-finding and the initiation of a rulemaking proceeding among others.

“The Commission has heard from many importers, exporters, and drayage trucking companies complaining about demurrage and detention charges that they must pay even though they cannot timely access their cargo or drop it off before free time expires. Though the Commission has received anecdotal evidence, the industry is encouraged to submit substantive documentation and information of unreasonable practices regarding the application of demurrage or detention,” Cordero added.

World Maritime News Staff