A 25 member coalition, representing Fair Port Practises, has issued a petition to the Federal Maritime Commission (FMC) that claims “Recent events involving port congestion, labour strife, an ocean carrier bankruptcy, inclement weather and other disruption events have had crippling effects on U.S. ports and the stakeholders who rely on the efficient movement of goods”.
The petition seeks to establish a new policy that prevents terminal operators and ocean carriers from charging unfair fees when uncontrollable incidents such as storms and strikes keep cargo from being picked up from ports on time.
Whenever these unforeseen disruptive events have occurred, storage and use charges have continued “even though shippers, consignees and drayage providers had no control over the events that caused the ports to be inaccessible and prevented them from retrieving their cargo or returning equipment.”
Typically, cargo owners and trucking companies are given a certain amount of free days to get to a port and pick up the goods or cargo that have been shipped. If for some reason they do not pick up the imports in that time period, they may incur a charge known as a ‘demurrage’ fee that supposedly ensures operations run efficiently. Additional fees can also be incurred if cargos containers and trailers used to haul the goods are not returned within an allocated time limit.
The whole system was sent into hysteria with the recent collapse of South Korean shipping company Hanjin that left cargo owners unable to pick up containers on time. This issue also made it impossible to return the trailers and containers within allocated time frames.
The coalition cited a number of incidents where large charges have been made:
- A trucking company was charged USD $1.2 million after lengthy lines at New York and New Jersey ports kept it from bringing back containers within the time limit.
- A retailer was charged $80,000 because it took up to nine days to recover containers. Usually only four free days are allocated as a return period.
- A transportation company was charged $1.25 million after being refused whilst attempting to return trailers. The amount was ultimately reduced to $250,000 but a year later the company was forced to pay the fees upfront and in full.
The group firmly believe that they should not be held responsible for some events that are entirely out of their control. They are challenging the FMC to adopt a policy that will allow for time extensions during weather issues, congestion and port disruptions.
Currently, the Federal Shipping Act states that fees need to be “just and reasonable”. Where that line eventually will be drawn is yet to be seen.
