FMC to discuss ‘big, huge step’ related to detention, demurrage and container returns

Date: Friday, February 12, 2021
Source: Supply Chain Dive

  • Federal Maritime Commission Commissioner Rebecca Dye will meet with fellow commissioners next week to provide an update on Fact Finding 29, the investigation into the pandemic's effects on the ocean shipping industry.
  • "What we're contemplating right now is a big, huge step," Dye said in an interview Wednesday, declining to provide exact details on what the step would be, though she did note it would involve detention and demurrage enforcement.
  • During the closed meeting, Dye will speak with her colleagues about plans around the practice of container returns, export container availability and the detention and demurrage enforcement, she said.

The congestion challenges supply chains are facing has led to calls from industry and the California state government for the FMC to step in and provide some relief.

"I've become more and more concerned about compliance with our rules on demurrage, and detention, and so we're going to begin an enforcement process," Dye said.

A recent survey by the Harbor Trucking Association and TradeLanes found that the average charge per container for detention and demurrage fees is $200 or more for 80% of respondents. The FMC issued final guidelines for detention and demurrage last year, but there have been concerns that carriers have not been following them.

The first step to enforcement will be getting on-the-record information about the allegations that the commissioners have been hearing. Shippers and truckers have told the commissioners that ocean carriers are charging them detention and demurrage fees, even when their circumstances are such that the FMC's guidelines should prevent the fees.

"I have enough information that we are concerned," she said. "I also believe there are some carriers who are complying substantially."

Dye said the FMC has law enforcement tools at its disposal to get this information on the record.

At the end of last year, Dye met with six ocean carriers as part of Fact Finding 29 to talk about container returns and port congestion issues.

"I have heard there are some very productive changes being considered," she said of the ocean carriers, noting that the changes are predominately related to container returns and dual transactions.

The trucking community in southern California has been calling for more dual transactions since last year, and the ports of Los Angeles and Long Beach have recently committed to efforts to increase their use.

In a letter to Dye last month, three California officials called on the FMC to help ease the congestion issues the local ports are facing.

"Immediate steps must be taken to help alleviate the multitude of challenges being experienced at the ports," the officials wrote, according to a copy posted by CNBC.

Dye said she responded to the letter, letting the officials know she was investigating the situation as part of Fact Finding 29 and provided them with an update, but said she has not heard back since then.

Dye did not outline the next steps following the Feb. 17 meeting, simply reiterating that, "What we're contemplating right now is a big, huge step."


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