Crippling demurrage fees mount as US Customs box throughput slows
CONTAINER retrieval delays resulting from government inspections are expected to be a continuing source of complaint of unfair demurrage and detention fees at the US Federal Maritime Commission (FMC), reports American Shipper
CONTAINER retrieval delays resulting from government inspections are expected to be a continuing source of complaint of unfair demurrage and detention fees at the US Federal Maritime Commission (FMC), reports American Shipper.
'Imposition of demurrage and detention during government inspections of cargo, and the delays associated with such inspections, is a significant problem for cargo interests and truckers,' the FMC said in its September 17 Federal Register notice of proposed interpretive rule.
'Such inspections not only involve cargo interests and regulated entities, but also government agencies, third parties and off-terminal facilities,' the FMC said.
The FMC's proposed rule provides guidance under the Shipping Act on what the commission considers to be fair and reasonable practices for ocean carriers and marine terminals to assess demurrage and detention fees on shippers.
The FMC's proposed interpretive rule includes: Promoting standardised language for demurrage and detention, simplifying the dispute resolution and billing practices, providing guidance on evidence relevance and ensuring consistent notice on container availability and equipment returns.
'Customs holds was one of three areas where concerns were expressed by industry,' FMC Commissioner Rebecca Dye told American Shipper. 'We hope the comment period will yield constructive suggestions on how to improve detention and demurrage procedures across all three categories identified.'
Public comments related to the FMC's notice of proposed interpretive rule are due at the agency by October 31.
Rich Roche, vice president of Syracuse-based Mohawk Global Logistics, said the problem of excessive demurrage and detention fees resulting from government inspections became increasingly apparent after Customs and Border Protection (CBP) in the spring ordered additional officers to the Mexican border to assist with the migrant crisis.
During this shift in CBP personnel from the seaports to the southern border, Mr Roche said the dwell times for cargo exams at Port Elizabeth, New Jersey, for example, increased to three weeks or more.
'We had one client with two containers in exam during this time that accrued US$5,000 each in detention charges, in addition to the dray and exam fees,' Mr Roche said.
Peter Friedmann, executive director of the Agriculture Transportation Coalition, said the cost of demurrage and detention fees applied against an importer or exporter during a government cargo exam outweighs the inconvenience to the ocean carrier or marine terminal.
'An ocean carrier who knows its shipper customers will understand the real impacts of government holds and not pile on per diem fees,' Mr Friedmann said.