Detention and demurrage disruptions are causing devastating damage to U.S. intermodal carriers and are placing large burdens on the shipping and transportation industry, the Harbor Trucking Association said in a new report. The association, which represents U.S. drayage carriers serving West Coast ports, and TradeLanes, a technology company focused on streamlining global commodity trade, surveyed HTA members and found that more than half reported critical negative effects on their business from the detention and demurrage costs. Detention and demurrage is common in the industry as well, with 64% of respondents saying that they incur them on more than 15% of their containers with the average price around $200 per container. Once the charges are levied, governmental relief is rarely given, with 80% of respondents saying they got charges reduced 0-25% of the time. The charges cost more than money, evidenced by the majority of respondents saying the invoices take at least 45 minutes to complete.
The National Customs Brokers & Forwarders Association of America issued several tips for industry dealing with unfair detention and demurrage fees. In a Feb. 1 email to industry, the group said shippers and traders should try to work out a “satisfactory arrangement” with the billing party and should reference the Federal Maritime Commission’s guidance on fees (see 2009140045 and 2011170041). If a “reasonable solution” can’t be reached, the NCBFAA recommends reaching out to FMC’s Office of Consumer Affairs and Dispute Resolution Services and sending a report to the FMC, which is reviewing the COVID-19 pandemic's impact on ocean transportation (see 2012180038 and 2011200024). The group also recommends bringing a formal case before the FMC if fees climb higher than six figures.
The Federal Maritime Commission is seeking tips from industry on ocean carriers and terminal operators that are violating regulations on detention and demurrage fees, the FMC said Dec. 17. The information will be used to aid the commission’s investigation into the unfair charges (see 2011200024) that began after industry complained FMC’s May rule on detention and demurrage was being ignored (see 2009140045 and 2011170041).
The Federal Maritime Commission is probing whether ocean carriers are refusing to supply containers to inland U.S. agricultural exporters in order to send more empty containers to Asia, FMC Chairman Michael Khouri said. Those actions may violate FMC regulations, he said, including the Shipping Act. “This abandonment of a significant U.S. export industry -- the American agricultural industry -- is shutting them out of global markets,” Khouri said during the Dec. 8 Global Maritime Conference. “We are looking into all potential -- I repeat -- all potential responsive actions.”
The International Federation of Freight Forwarders Associations issued a “toolkit” for industry to better understand and apply the Federal Maritime Commission’s May rule on detention and demurrage fees (see 2004290037). The toolkit, released last week, summarizes the rule, details its applicability and scope, and analyzes industry objections. The FMC recently announced an investigation into whether ocean carriers are violating regulations on detention and demurrage charges (see 2011200024), after industry said the rule is being ignored (see 2011170041).
The Federal Maritime Commission will begin investigating whether ocean carriers are violating regulations on detention and demurrage fees, container returns and container availability for U.S. exports, the agency said Nov. 20. The investigation, which will be led by FMC Commissioner Rebecca Dye, will look at ocean carriers operating in alliances at the Port of Long Beach, the Port of Los Angeles and the Port of New York and New Jersey to determine if their unfair fees and container practices are “amplifying the negative effect of bottlenecks” at the ports.
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More than 40 trade groups urged the Federal Maritime Commission to suspend certain detention and demurrage charges they say are being unfairly imposed by ocean carriers and marine terminals, saying the charges violate guidelines issued by the FMC in May (see 2004290037). The groups said their members have paid more than $150 million in “unreasonable” fees at the ports of Los Angeles and Long Beach and the Port of New York and New Jersey due to “massive congestion created by record setting volumes” and a shortage of labor and available chassis.
The Federal Maritime Commission plans to discuss a rise in non-compliance with its May rule (see 2004290037) on detention and demurrage charges after industry complained that the rule is being ignored, Rebecca Dye, an FMC commissioner, said during a Nov. 10 session at the Coalition of New England Companies for Trade virtual conference. She said she will soon make “recommendations” to other commissioners to address the rule and other issues, including problems surrounding container returns.
The Nigerian Shippers Council ordered terminal operators to refund unauthorized transfer and storage charges on shippers and freight forwarders or “face serious sanctions,” the Hong Kong Trade Development Council reported Oct. 13. Shippers and freight forwarders complained to the NSC, the country’s port regulator, that they have been “arbitrarily charged levies” on container demurrage, storage and transfer by shipping firms and terminal operators for the “transport of goods to off‑dock terminals without their knowledge,” the report said. The NSC ordered port operators and other shipping agencies to “immediately” refund the charges collected since June 1 or face a “total shutdown.” Some terminals have not complied with the order, including Nigeria’s Denca Bonded Terminal, which allegedly owes more than $100,000 (in U.S. dollars) in refunds. The NSC plans to place staff at bonded terminals “to gather weekly reports on charges.” NSC issued guidance, according to the HKTDC report, indicating that “storage and demurrage fees on goods that need to be moved from seaport terminals to off‑dock terminals without the consignees’ consent should only be imposed after the goods’ arrival at the designated off‑dock terminals.”