OCEAN PORT CONGESTION UPDATE
In December of 2016, the Coalition for Fair Port Practices filed a petition with the Federal Maritime Commission (FMC) regarding detention and demurrage charges that shippers face. The coalition is asking the FMC to step in and regulate these charges that carriers and terminal operators impose.
The Coalition for Fair Port Practices is pushing the FMC to address the issue of shippers being charged detention and demurrage when they are actually unable to pickup or return containers or chassis for reasons beyond their control.
The coalition is urging the FMC to clarify what constitutes “just and reasonable rules and practices” in terms of charges when ports are congested and inaccessible. Shippers are considering the charges that steamship lines and terminals implement unlawful when there are circumstances that prevent shippers from retrieving or returning containers. Shippers argue that free time should be extended in these scenarios since there is nothing the shipper can do to alleviate the charges.
The FMC has not taken action on the topic but has been accepting comments and has received a lot of feedback. The coalition has insisted that they are not pressing the FMC to take legal action against this issue but they are asking the FMC to issue a policy regarding unjust practices pertaining to detention and demurrage in the events of port congestion or other issues beyond shipper’s control.
The FMC has the authority to issue a policy statement regarding this topic but those who oppose the petition argue that the coalition is asking that the FMC create a substantive rule which is beyond the FMC’s statutory authority. The World Shipping Council and the National Association of Waterfront Employers are both opposed to the petition and have advised the FMC of their stance.