FMC Presses To Finalize Container Availability Rule

The U.S. Federal Maritime Commission (FMC) said on Thursday its legal staff is working diligently to finalize an interpretive rule regarding the fair assessment of demurrage and detention fees on shippers by ocean carriers and marine terminals.

Trade groups told the FMC this month that with the routine disruptions at U.S. container terminals due to the coronavirus (COVID-19) pandemic, concerns are heightened among shippers and their drayage service providers about unfair demurrage and detention fees.

Demurrage pertains to the time an import container sits in a container terminal, with carriers responsible for collecting penalties on behalf of the marine terminals. Detention relates to shippers holding containers for too long outside the marine terminals.

For years, shippers have complained to the FMC about the unfair imposition of these fees whenever container equipment cannot be returned or picked up during the free period for reasons out of their control. The daily fees reportedly range from $150 to $350 per container.

The FMC initiated its container availability rulemaking process last fall, after the commission unanimously approved Commissioner Rebecca Dye's container availability recommendations on Sept. 6.

The proposed rule received over 100 comments, which were mostly positive. The FMC's legal staff is finishing its review of those comments and is expected to deliver a report for commission review within the next several weeks.

"Given the evolving supply chain developments and the public interest in the proposed rule, the commission will expedite its review and decision process," the FMC said in a statement on Wednesday.

Through the interpretive rulemaking, the FMC wants to clarify how ocean carriers and marine terminals provide notice to shippers when their cargo is available for retrieval, as well as demurrage and detention policies and dispute resolution.

The FMC said it serves an important role to "bring stakeholders in the ocean supply chain together to proactively and prospectively address problems and collaboratively agree on non-regulatory solutions," adding that the commission has "under consideration whether this approach might be beneficial to help address supply chain bottlenecks as economic activity resumes and commerce begins to flow."

"We know shippers do not have sufficient access to refrigerated containers, ports are facing excess numbers of empties, and terminals and warehousing facilities are dealing with operational difficulties due to volume swings, potential cases of COVID-19, and shortages of appropriate equipment to properly protect vital workers from becoming sick," said FMC Commissioner Daniel Maffei in a statement.

"The good news is that dedicated workers in marine terminals as well the sailors, truckers, and rail workers — and all of those that support them — are continuing to work through this crisis and serve the nation," he added.

China has reportedly started returning to normal operations at its container terminals this week.

"I remain concerned that there will continue to be negative economic impacts as a result of delays, as shipments transit the Pacific from China," FMC Commissioner Carl Bentzel said. "I would hope that the industry resists the temptation to take actions to price gouge or otherwise unfairly leverage their position.

"It will be necessary for all segments of the transportation industry from the marine terminals to trucking and rail services to help pitch in to secure normalcy."