Birds-eye view of a shipping yard with a freighter full of shipping containers. Getty Images

NPPC joins coalition backing petition on demurrage fees

Work slowdowns at West Coast ports in 2014 and 2015 caused severe disruptions in pork and other goods exports and led some exporters to incur demurrage and other fees.

Source: National Pork Producers Council 

Dozens of freight forwarding firms, custom house brokers and shippers’ associations sent letters in support of a petition filed by the Coalition for Fair Port Practices, which includes the National Pork Producers Council, with the Federal Maritime Commission, requesting that it promulgate a new rule prohibiting terminal operators and shipping lines from charging detention, demurrage and per diem fees when circumstances — such as labor disputes — don’t allow cargo to be picked up or dropped off within contracted times.

Cargo owners and trucking companies normally are given a number of free days to pick up containers of imported goods from ports after they have been unloaded from ships. After that, they can be charged demurrage, a fee intended to ensure that containers are removed quickly and efficiently. In addition, detention and per diem fees can be charged if the cargo containers and the trailers used to haul them are not returned to the terminal within a specified time.

The federal Shipping Act requires that the fees and related practices must be “just and reasonable.” The petition asks the FMC to adopt a policy that would require free days to be extended during times of port congestion, weather-related events, port disruptions or delays caused by government actions or requirements beyond the control of the parties picking up or returning containers. Demurrage and similar fees charged during such incidents would be declared “unreasonable.” In some cases, “compensatory” fees could be charged provided they do not exceed actual storage or equipment use costs.

In late-2014 and early 2015, work slowdowns at West Coast ports caused severe disruptions in pork and other goods exports and led some exporters to incur demurrage and other fees. The requested policy would apply to ocean carriers and marine terminal operators.

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