The US Federal Maritime Commission (FMC) has launched its investigation into the practices of terminal operators and ocean carriers charging what has been deemed unfair demurrage, detention fees and per diem charges.
The investigation stems from a December 2016 petition from the Coalition for Fair Port Practices requesting the FMC clarify, through a rulemaking process, what constitutes “just and reasonable rules and practices” with respect to the assessment of the charges imposed by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.
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US hearings to address “unfair” port charges
Commissioner Rebecca Dye will evaluate five key issues: whether the alignment of commercial, contractual, and cargo interests enhances or aggravates the ability of cargo to move efficiently through US ports; when has the carrier or MTO tendered cargo to the shipper and consignee; the billing practices for invoicing demurrage or detention; the practices with respect to delays caused by various outside or intervening events; and the practices for resolution of demurrage and detention disputes between carriers and shippers.
“The Coalition raised substantive issues in both their petition and their testimony at our January hearing,” said acting chairman Michael Khouri. “Various alleged practices were described that—without countervailing or explanatory testimony and evidence—would be troubling from my perspective. However; without any filed complaints by cargo stakeholders, where the crucible of adversary proceedings can bring light and transparency to such practices, I supported this investigatory fact finding so as to more fully develop a tested factual record.”
Dyer will have broad authority to conduct the probe, including the power to issue subpoenas, hold public and non-public sessions, and require reports. She is charged with making recommendations for FMC action, including investigations of prohibited acts, enforcement priorities, policies, rulemaking proceedings, or other actions warranted by the record developed in the proceeding.
A final report of findings and recommendations is due to the Commission no later than 2 December 2018.
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By GlobalData“While many questions remain after the hearing, I do believe it effectively established that the practices surrounding detention and demurrage charges can be out-of-date, confusing, inconsistent, and, in my view, often unfair,” added Commissioner Daniel Maffei. “Today the Commission unanimously takes the first step towards corrective action through a comprehensive Order of Investigation that will bring all the relevant facts to light.”
