THE US Federal Maritime Commission (FMC) is on the verge of regulatory overreach that could hurt cargo flow through American ports, according to terminal operators, reports New York's Journal of Commerce.
The FMC has until mid-June to issue final rules on detention and demurrage billing, a process mandated by the Ocean Shipping Reform Act of 2022 (OSRA-22), signed into law last June.
But ocean carriers are already rushing to fall in line, with a string of liners announcing in recent weeks they will cease charging detention and demurrage on containers that cannot be picked up or dropped off when a terminal is closed for business.
Warning that the FMC rulemaking misinterprets the intent of OSRA-22, Matt Leech, CEO of Ports America, said marine terminal operators (MTOs) will find a way to make up the D&D revenue shortfall, whether by increasing weekday charges or charging weekly.
Ports America and MTOs are in favour of OSRA-22 and detention and demurrage rulemaking when it follows the interpretive rule - the original intent of the legislation that states the charges must incentivise movement.
'It doesn't make sense not to allow a terminal to charge for storage when a container is sitting on a terminal occupying space,' Mr Leech said.
The decisions by Maersk, HMM, and Mediterranean Shipping Co. to stop charging detention and demurrage when a terminal is closed 'jumped the gun,' Mr Leech said, following a December ruling by the FMC that said terminals cannot charge detention on weekends.
'Part of our initial process has been asking, 'Can we wait until we get to the rules? Why do that now?'' He said: 'It's unclear.'
And the FMC's December ruling only involves detention - the compensation for excess use of equipment - and not demurrage, or container storage, and he cautions against lumping them together.
'The biggest issue we have right now is do regulators actually understand our business well enough to be able to set the appropriate rules?' he said.
SeaNews Turkey
The FMC has until mid-June to issue final rules on detention and demurrage billing, a process mandated by the Ocean Shipping Reform Act of 2022 (OSRA-22), signed into law last June.
But ocean carriers are already rushing to fall in line, with a string of liners announcing in recent weeks they will cease charging detention and demurrage on containers that cannot be picked up or dropped off when a terminal is closed for business.
Warning that the FMC rulemaking misinterprets the intent of OSRA-22, Matt Leech, CEO of Ports America, said marine terminal operators (MTOs) will find a way to make up the D&D revenue shortfall, whether by increasing weekday charges or charging weekly.
Ports America and MTOs are in favour of OSRA-22 and detention and demurrage rulemaking when it follows the interpretive rule - the original intent of the legislation that states the charges must incentivise movement.
'It doesn't make sense not to allow a terminal to charge for storage when a container is sitting on a terminal occupying space,' Mr Leech said.
The decisions by Maersk, HMM, and Mediterranean Shipping Co. to stop charging detention and demurrage when a terminal is closed 'jumped the gun,' Mr Leech said, following a December ruling by the FMC that said terminals cannot charge detention on weekends.
'Part of our initial process has been asking, 'Can we wait until we get to the rules? Why do that now?'' He said: 'It's unclear.'
And the FMC's December ruling only involves detention - the compensation for excess use of equipment - and not demurrage, or container storage, and he cautions against lumping them together.
'The biggest issue we have right now is do regulators actually understand our business well enough to be able to set the appropriate rules?' he said.
SeaNews Turkey
