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Shippers in the US urge FMC to make changes to the Shipping Act

Shippers in the US urge FMC to make changes to the Shipping Act

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The National Retail Federation and a coalition representing retailers, manufacturers, truckers, transportation intermediaries and other business groups in the US has asked the Federal Maritime Commission (FMC) to set a new policy preventing terminal operators and ocean carriers from charging what they describe as “unfair fees” when uncontrollable incidents such as storms and strikes keep cargo from being picked up from ports on time.

“Shippers, consignees and drayage providers do not create and cannot avoid these events,” the group said in a release.

“Recent events involving port congestion, labour 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,” the 25-member Coalition for Fair Port Practices said in a petition filed with the commission. During the incidents, storage and use charges have continued “even though shippers, consignees and drayage providers had no control over the events that caused the ports to be inaccessible and prevented them from retrieving their cargo or returning equipment.”

Cargo owners and trucking companies are normally given a certain number of free days to pick up containers of imported goods from ports after they have been unloaded from ships. After that, they can be charged demurrage, a fee intended to ensure that containers are removed quickly and efficiently. In addition, detention and per diem fees can be charged if the cargo containers and the trailers used to haul them, officially known as chassis, are not returned within a specified time.

That system was thrown into disarray this autumn when the bankruptcy of South Korea’s Hanjin Shipping left cargo owners unable to pick up containers on time and later prevented them from returning containers and chassis. Delays have also occurred during other port disruptions cited in the petition, including the 2014-2015 labour slowdown at West Coast ports and Hurricane Sandy on the East Coast in 2012.

The coalition said millions of dollars in fees have been charged during such incidents.

The federal Shipping Act requires that the fees and related practices be “just and reasonable”. The petition asks the FMC to adopt a policy that would require free days to be extended during times of port congestion, weather-related events, port disruptions or delays caused by government actions or requirements beyond the control of the parties picking up or returning containers. Demurrage and similar fees charged during such incidents would be declared “unreasonable”. In some cases, “compensatory” fees could be charged provided that they did not exceed actual storage or equipment use costs. The proposed policy would apply to ocean carriers and marine terminal operators.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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