FMC Issues Interim Report, Notice of Proposed Rulemaking

Last week, the Federal Maritime Commission (FMC) issued an interim report on its investigation of detention and demurrage practices, and a notice of proposed rulemaking (NPRM) for “just and reasonable regulations and practices relating to or connected with receiving, handling, storing or delivery property.” The interim report was issued under FMC Fact Finding 28, which the commission undertook following a hearing on a petition from TIA and nearly 30 associations representing shippers, intermediaries, and port drayage motor carriers.

The investigation, report, and NPRM all indicate an ongoing careful examination by the FMC of port practices that lead to substantial detention and demurrage costs for port users. The investigation is being led by FMC Commissioner Rebecca Dye and will submit its final report by Dec. 2, 2018. The interim report indicates the investigation has focused on six core elements of the U.S. international freight system:

• Transparent, standardized language for demurrage, detention, and free time practices
• Clarity, simplification, and accessibility regarding demurrage and detention billing practices and dispute resolution processes
• Explicit guidance regarding types of evidence relevant to resolving demurrage and detention disputes
• Consistent notice to shippers of container availability
• An optional billing model wherein (a) marine terminal operators bill shippers directly for demurrage; and (b) ocean carriers bill shippers for detention
• An FMC Shipper Advisory or Innovation Team

TIA is a founding member of the Coalition for Fair Port Practices, which filed a petition regarding these unreasonable detention and demurrage practices at U.S. ports in Dec. 2016. That petition led to an FMC hearing in Jan. 2018 and to the Fact Finding 28 investigation that began in March. The investigation is an opportunity for the FMC to understand the challenges facing U.S. ports and port users, and to provide guidance on “just and reasonable” practices under the Shipping Act of 1984. This clarification will reduce confusion among supply chain partners and encourage commercial solutions to move cargo more efficiently.

TIA staff will continue working with the Coalition on behalf of members who are impacted by unreasonable detention and demurrage charges, and will provide comments on the Notice of Proposed Rulemaking. On this issue, TIA staff is also able to leverage its participation in the Working Group Sea Transport advisory group of FIATA, the International Federation of Freight Forwarders Associations, to inform its comments and advocacy.

For more information on this issue, or to participate in TIA’s International Logistics Conference, please contact Will Sehestedt at sehestedt@tianet.org.