DEMURRAGE and cargo detention fees are not nearly so unjust as shippers say, declares World Shipping Council (WSC) chief executive Christopher Koch.
"There are no simple answers or appropriate scapegoats. There are not good guys and bad guys," he told Federal Maritime Commission (FMC) chairman Mario Cardero in an appeal for understanding for the position of carriers and terminal operators.
Demurrage has long been a source of shipper and trucker complaint. The FMC has been looking into demurrage and free-time penalties assessed for containers that shippers say congestion has prevented them from picking up or delivering on time.
But Mr Koch, whose Washington-based group represents 90 per cent of global container ocean traffic, said there was lots blame to go round.
Port congestion in US ports can arise from multiple causes, and those cause may vary by port and marine terminal," he said in his letter to the FMC chairman.
"Some causes of congestion can beyond any party's control, such a weather. Some can result from shortages of various types of equipment. Some can be the result of labour issues," he said.
Trying to assign responsibility for who caused what in port congestion would be difficult, complex and unsatisfying," said Mr Koch.
"Making a genereralised judgment about what mechanism by what party would be appropriate to recover congestion costs or help manage port terminal efficiency would be quagmire," he said.
"If a shipper waits until the last free day to pick up or return a container and that results in bunching and terminal congestion, is the commission going to be asked to require the terminal operator or the ocean carriers to absorb the costs?
"Ocean carriers' rules on detention and demurrage create valid economic incentives, as the commission has long recognised. These charges have been in effect for decades; carriers did not establish them recently to take advantage of congestion.
"For example, is the commission going to be asked to decided what a terminal operator or an ocean carrier must assume congestion cost when the longshore labour force refused to work at full strength and efficiency?
"Is the commission going to be asked to decide to make a generalised judgment about when it would appropriate for a shipper not to pay detention charges when it failed to return a container to a port facilities after its free time has expired and that container is needed by another shipper?
"There is no regulatory action that will address the combination of causes of port congestion or that can equitably resolve or simplify the various complex market force tying to deal with the unavoidable issue of cost recovery," said Mr Koch.
WORLD SHIPPING
27 May 2015 - 19:50
World Shipping Council backs demurrage to Federal Maritime Commission
DEMURRAGE and cargo detention fees are not nearly so unjust as shippers say, declares World Shipping Council (WSC) chief executive Christopher Koch.
WORLD SHIPPING
27 May 2015 - 19:50
World Shipping Council backs demurrage to Federal Maritime Commission
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