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FMC to get tough on demurrage fees

The Federal Maritime Commission (FMC) is gearing up to take action over the thorny issue of port congestion and runaway demurrage fees being charged to shippers, truckers and freight forwarders in US ports.

A powerful coalition of truckers, agricultural exporters and freight forwarders have been lobbying hard for a suspension of demurrage fees in the heavily congested ports of Los Angeles / Long Beach and New York.

The coalition, led by the Harbor Trucking Association, estimates that congestion has been responsible for US$150 million in unreasonable demurrage fees charged to its members in 2020.

In response to industry submissions on the issue, the FMC has appointed Commissioner Rebecca Dye, as the designated fact finding officer, to investigate ocean carriers operating in alliances and calling the Port of Long Beach, the Port of Los Angeles, or the Port of New York and New Jersey.

“Because of these stakeholder concerns, the Commission now has a clear and compelling responsibility to investigate the practices and regulations that are having an unprecedented negative impact on congestion and amplifying bottlenecks at these ports and other points in the Nation’s supply chain,” said the statement. “This is a serious risk to the growth of the U.S. economy, job growth, and to our Nation’s competitive position in the world.”

The expanded Commission investigation will seek to determine if the policies and practices of those shipping companies related to detention and demurrage, container return, and container availability for US export cargoes violate existing regulation 46 U.S.C. 41102(c).

“The time has come to resolve the most serious impediments to port performance:” said Dye. “I’d like to thank my fellow Commissioners for their support of the Supplemental Order for Fact Finding 29, as I focus the investigation on the extreme conditions in the Ports of Los Angeles, Long Beach, and New York/New Jersey. The Order emphasizes I, as Fact Finding Officer, have all enforcement options at my disposal to address the crisis that exists in our major port gateways.”

In particular the investigation will focus on: “The potentially unreasonable practices of carriers and marine terminals regarding container return, export containers, and demurrage and detention charges in the Ports of Los Angeles Long Beach and New York/New Jersey present a serious risk to the ability of the United States to handle trade growth,” according to the FMC.

Rainbow Blue Nelson
Americas Correspondent

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