March 6, 2018 12:45 PM, EST

Maritime Commission to Investigate Port Operator Charges on Demurrage, Delays

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The Federal Maritime Commission has ordered a formal investigation on the detention, demurrage and per diem charges made by ocean carriers and marine terminal operators.

Commissioner Rebecca Dye will lead the investigation and have the authority to issue subpoenas and hold hearings, and make recommendations on commission actions on enforcement and rulemaking. A final report is due by Dec. 2.

“I look forward to working with our stakeholders to strengthen the nation’s freight delivery system and increase American competitiveness,” Dye said.

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Dye’s investigation will focus on billing practices for demurrage and detention, how supply chain delays caused by major events at ports are treated, and whether current practices help or hinder the efficient movement of cargo through U.S. ports.

Acting Chairman Michael A. Khouri noted Dye’s work examining supply chain reliability and resilience, and said she was “uniquely qualified” to lead the effort.

The call for an investigation follows a two-day hearing in Washington last January by the commission, where representatives of trucking companies and beneficial cargo owners reported that they were charged fees during major events like weather emergencies and labor slowdowns when it was virtually impossible to pick up and return containers.

The Coalition for Fair Port Practices, a group representing trade associations, asked that detention and demurrage fees should not apply when a problem is beyond the control of the trucker.

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Ocean carriers and terminal operators responded that current charging practices generally work well and that shippers had the ability to choose their ports, terminals and transportation partners.

But Khouri said that the Coalition for Fair Port Practices raised substantive issues in both their petition and their testimony at our January hearing investigating carrier and terminal detention and demurrage practices. “Various alleged practices were described that — without countervailing or explanatory testimony and evidence — would be troubling from my perspective. However, without any filed complaints by cargo stakeholders, where the crucible of adversary proceedings can bring light and transparency to such practices, I supported this investigatory fact finding so as to more fully develop a tested factual record,” Khouri said.

In announcing the investigation Commissioner Daniel Maffei said, “While many questions remain after the hearing, I do believe it effectively established that the practices surrounding detention and demurrage charges can be out of date, confusing, inconsistent, and in my view, often unfair.”