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Ag shippers seek immediate action on demurrage fees

Ag shippers seek immediate action on demurrage fees

Ongoing injury to U.S. ag industries as a result of unjustified penalties is very real, especially with the challenges posed by the coronavirus.

Nearly 80 associations representing the U.S. food and agriculture supply chain requested urgent engagement from Trump administration officials to ensure the competitive, fluid movement of shipping containers to international markets.

In an April 3 letter to National Economic Council Director Larry Kudlow and Secretary of Agriculture Sonny Perdue, the groups requested their “urgent intervention” to encourage the U.S. Federal Maritime Commission (FMC) to adopt a rule that would address “the ongoing unconscionable imposition of millions of dollars of unfair detention and demurrage penalties on U.S. agriculture by ocean carriers and marine terminal operators during the coronavirus crisis.”

Ocean carriers and terminal operators are imposing detention and demurrage charges when ocean freight containers cannot be returned or picked up within a short “free time” window, even when the delay is caused by the ocean carriers or terminals themselves, the groups explained. 

“These fundamentally unfair fees are frequently exorbitant in nature, even exceeding the negotiated freight rates in some cases, and render U.S. agriculture exports less competitive in the global markets,” the letter said. 

The FMC investigated the fees over the course of three years and unanimously voted in August 2019 to publish a proposed rule to curtail these abusive detention and demurrage practices. The groups urged Kudlow and Perdue to work with the FMC to expeditiously adopt and finalize the rule. 

“The ongoing injury to U.S. agriculture and forestry industries as a result of these unjustified penalties is very real, especially with the challenges posed by the coronavirus,” the groups said. “There is great concern about detention and demurrage fees being assessed when there are equipment issues beyond the control of the shipper or motor carrier as a result of the pandemic.”

Organizations who signed onto the letter include the National Grain and Feed Association (NGFA), Agriculture Transportation Coalition, Agricultural Retailers Assn., American Farm Bureau Federation, American Feed Industry Assn., National Assn. of Egg Farmers, USA Poultry & Egg Export Council, U.S. Dairy Export Council, Pet Food Institute and U.S. Meat Export Federation.

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