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Port delays resulting in detention and demurrage fees being charged to carriers.
May 6, 2015
Despite reaching an agreement in February 2015, nine months of failed contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association have continued to take an economic toll on companies as port terminals remain congested.
Agriculture groups, as well as several other stakeholders, last week urged the Federal Maritime Commission (FMC) to take further action to address unfair and unreasonable detention and demurrage fees being charged to carriers at West Coast ports.
A total of 94 trade associations, including American Soybean Association (ASA), signed onto a letter to the FMC Chairman, pointing out the penalties being imposed even when factors beyond the carriers control make it impossible for them to return chassis and empty containers, or pick up or drop off loaded containers within time limits. Additionally, the letter expressed that that the practice of charging detention and demurrage under such circumstances represents an unfair and unreasonable practice that may potentially violate the Shipping Act.
“While additional documentation may be needed on industry specific complaints, we believe the record is already well established that limiting free time and assessing and collecting demurrage and per diem charges from port stakeholders who are not responsible for the port congestion gridlock is both unfair and counterproductive to finding much needed solutions for improving port operational efficiencies,” the letter noted.
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