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Shippers want new deal on demurrage charges from FMC at US ports
US SHIPPERS want new rules from the Federal Maritime Commission (FMC) on demurrage, detention and per diem charges by carriers and terminal operators when ports are too congested for the timely pickup of cargo or return of equipment, reports the American Journal of Transportation.
Specifically, 26 trade associations of shippers and truckers are petitioning the FMC "to clarify what constitutes ˉjust and reasonable rules and practices' with respect to the assessment of demurrage.
American Apparel and Footwear Association (AAFA) vice president Nate Herman said that when events like the 2016 Hanjin Shipping bankruptcy or a port lockout or severe weather occur "cargo owners get caught in the middle".
"There is a need to establish standard procedures" by FMC for detention and demurrage charges that amount to millions of dollars assessed to shippers, consignees and drayage providers.
The Coalition for Fair Port Practices petition requests FMC guidance to ensure that these charges are not used to generate revenue for carriers or terminal operators which lack contractual relationships with the parties paying the charges.
"A major point of contention is the "free time" extension by carriers for shippers at the ports. Demurrage charges are made assessed for shippers' cargo occupying terminal space and arranged by carriers through MTOs and detention is the charge to shippers and consignees for use of ocean containers and other equipment (eg chassis)," said the report.
Per diem charges are by day to drayage providers for use of ocean containers and equipment, according to the Coalition's Petition to the FMC.
Specifically, 26 trade associations of shippers and truckers are petitioning the FMC "to clarify what constitutes ˉjust and reasonable rules and practices' with respect to the assessment of demurrage.
American Apparel and Footwear Association (AAFA) vice president Nate Herman said that when events like the 2016 Hanjin Shipping bankruptcy or a port lockout or severe weather occur "cargo owners get caught in the middle".
"There is a need to establish standard procedures" by FMC for detention and demurrage charges that amount to millions of dollars assessed to shippers, consignees and drayage providers.
The Coalition for Fair Port Practices petition requests FMC guidance to ensure that these charges are not used to generate revenue for carriers or terminal operators which lack contractual relationships with the parties paying the charges.
"A major point of contention is the "free time" extension by carriers for shippers at the ports. Demurrage charges are made assessed for shippers' cargo occupying terminal space and arranged by carriers through MTOs and detention is the charge to shippers and consignees for use of ocean containers and other equipment (eg chassis)," said the report.
Per diem charges are by day to drayage providers for use of ocean containers and equipment, according to the Coalition's Petition to the FMC.
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