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December 12, 2017

US apparel industry calls for shipping charge rules

The US apparel and footwear industry is calling on the Federal Maritime Commission (FMC) to establish rules that will stop charges to shippers that also prevent companies from retrieving their cargo in a timely manner.

The US apparel and footwear industry is calling on the Federal Maritime Commission (FMC) to establish rules that will stop charges to shippers that also prevent companies from retrieving their cargo in a timely manner.

In an open letter to Rachel Dickon, assistant secretary for the Federal Maritime Commission (FMC), the American Apparel & Footwear Association (AAFA) says the industry is in “strong support” of the 2016 Coalition for Fair Port Practices petition.

The petition was filed in December last year by more than 20 trade associations, describing a practice by carriers and terminals of applying unfair demurrage and detention charges against shippers that, through no fault of their own, are unable to retrieve their containers prior to the “free time” expiration. This has occurred during times of port congestion, labour slowdowns due to contentious dockworker contract negotiations, infrastructure meltdowns, and inclement weather.

The FMC has said it will hold a public hearing related to the petition at its Washington headquarters on 16 and 17 January.

In his letter, AAFA chairman and CEO, Rick Helfenbein, has urged the FMC to adopt a rule with respect to the application of such charges in extreme circumstances.    

“As beneficial cargo owners who work in an industry where lean inventories, quick turn, and on-time delivery are everything, we make every effort to remove our cargo from the ports as quickly as possible,” he says. “However, as noted in the petition, there have been a significant number of extreme circumstances in the past five years that have prevented us, through no fault of our own, from retrieving our cargo in a timely manner.

“Despite the fact that we, as beneficial cargo owners, have had no control over these extreme circumstances, our industry’s cargo has been subject to demurrage, detention, and per diem charges. In many cases, these charges were arbitrary, non-transparent, and unreasonable.”

To prevent such situations from happening in the future, Helfenbein recommends the FMC establish rules that would provide guidance for vessel ocean common carriers and marine terminal operators on how the charges should be applied in extreme circumstances.

“To the question of whether the FMC has the authority to issue such a rule, we believe that the original petition, the comments, and the rebuttal comments submitted by the Commission for Fair Port Practices, of which the American Apparel & Footwear Association is a member, firmly establish that the FMC does have the authority to implement a rule on this issue,” he adds. “Again, we urge the FMC to issue a rule on demurrage, detention, and per diem charges as soon as possible, so that all stakeholders clearly understand the rules before the next extreme situation arises.”

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