The National Retail Federation and 24 other organizations including the National Pork Producers Council petitioned the Federal Maritime Commission (FMC) to 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-early 2015, work slowdowns at West Coast ports caused severe disruptions in pork and other goods exports. The proposed policy would apply to ocean carriers and marine terminal operators. The effort is the latest in a series of actions NPPC has taken as part of the Agriculture Transportation Coalition, the Ports Coalition and the Coalition for Fair Port Practices to help avoid disruptions in U.S. exports.
In related news, The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) week announced that meetings have been scheduled to discuss collective bargaining issues associated with the master labor contract covering the nation’s East Coast and Gulf Coast ports.
In 2013, when ILA and USMX had disputes over labor contracts, agricultural groups, including NPPC, expressed concern in a letter to President Obama about a possible strike at ports and emphasized the importance of international trade to the vitality of American animal agriculture. Last year, the two sides announced the possibility of an early extension of the master labor contract, which expires in September 2018, but little progress had come of those talks.