FMC Detention/Demurrage Investigation Moves Forward

On April 2, 2018, the Federal Maritime Commission launched the first phase of its investigation into detention, demurrage, and free time practices at U.S. ports by requesting information on those practices from shipping lines and container terminal operators. TIA is a founding member of the Coalition for Fair Port Practices, whose petition regarding these practices led to a hearing in January 2018 and now an investigation by the agency. The investigation, Fact Finding 28, will be led by FMC Commissioner Rebecca Dye and will issue a final report no later than December 2, 2018.

The Coalition for Fair Port Practices requested that the FMC issue guidance to all parties involved in moving cargo through U.S. ports as to what constitutes “just and reasonable practices” for the assessment of detention, demurrage, and per diem charges in the event of delayed cargo processing. The issue became a critical concern for members of the coalition during the U.S. West Coast Port slowdown relating to contract negotiations between labor and management in late 2014 – early 2015. The original petition from the Coalition can be viewed here.

At the FMC hearings on January 26-17, 2018, witness testimony emphasized that shippers and intermediaries are not party to the contracts between ocean carriers and marine terminal operators, or between terminal and port management and labor unions. As a result, the shipper and intermediary should not bear the burden of unfair costs when cargo is delayed as a result of circumstances related to those agreements which are out of their control.

TIA is working hard to advocate for its members involved in the movement of international freight and global supply chains. This work includes advocacy to the Federal Maritime Commission, U.S. Customs and Border Protection, as well as legislators on Capitol Hill. For more information on these efforts, please contact Will Sehestedt at sehestedt@tianet.org or 703-299-5700.