FMC to Address Non-Compliance With Detention, Demurrage Rule
The Federal Maritime Commission plans to discuss a rise in non-compliance with its May rule (see 2004290037) on detention and demurrage charges after industry complained that the rule is being ignored, Rebecca Dye, an FMC commissioner, said during a Nov. 10 session at the Coalition of New England Companies for Trade virtual conference. She said she will soon make “recommendations” to other commissioners to address the rule and other issues, including problems surrounding container returns.
Dye said she has heard “terrible reports” about container return practices and “the lack of compliance” with the commission’s demurrage and detention rule. Industry had hoped the rule would address what it said are unfair detention fees caused by COVID-19-related delays (see 2004070037 and 2003190041), but they said the guidance is not being followed by carriers (see 2009140045).
Although Dye said that some carriers are waiving demurrage and detention charges, she acknowledged that others aren’t. She said she recently spoke with a “premier’ ocean carrier who said his company wanted to comply with the rule but their marine terminal “could not conform their systems to allow performance with the rule.”
Dye said she “strongly” supports “deregulatory measures” for ocean carriers and terminals but said both should work more closely together to fix port performance, which she said is at the root of the problem. “Here's my proposal: Instead of charging truckers and shippers for port inefficiency, fix the problems,” Dye said. “Addressing port performance will remove the staggeringly large charges for demurrage and detention and allow charges that incentivize good behavior.”
She said unnecessary demurrage and detention charges are “a drag on the American economy,” and said she is hopeful the problems will end once the COVID-19 pandemic does. “Believe me, I wish I had a crystal ball,” Dye said. “Like all of you, I look forward to anything related to the pandemic being over.”