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FMC starts investigation into demurrage

Jun 01, 2018
Commissioner Rebecca Dye has launched the first phase of her investigation into port demurrage, detention, and free time practices by ordering ocean common carriers to provide information and documents explaining those practices. A similar effort with respect to container terminals at major US ports is also underway.

The Federal Maritime Commission (FMC) initiated the investigation, Fact Finding 28, under a Commission Order dated March 5, 2018. The first phase of Commissioner Dye’s investigation involves gathering information from ocean common carriers and marine terminal operators serving a broad section of container ports located throughout the United States. Carriers have been directed to provide detailed information about their detention and demurrage practices, especially regarding circumstances where shippers are not able to retrieve cargo.

Seattle, a major US port."The ultimate resolution of this investigation will have the potential to affect every ocean common carrier calling the United States,” said Commissioner Dye. “It is vital that the information we gather is representative of business and operational practices, as well as market conditions, nationally.”

Commissioner Dye emphasised that it is critical that shippers, dray truck companies and other affected parties who can document specific allegations and provide supporting materials of unreasonable port detention and demurrage practices and fees step forward and cooperate with the investigation. "We expect concerned parties to participate robustly in this investigation. Their cooperation is essential," said Commissioner Dye.

“This investigation is absolutely necessary given the prevalent situation shippers find themselves in,” said Klaus Lysdal, Vice President of Sales and Operations at iContainers. “Billing and rate levels skyrocketed as ocean rates took a dive years ago, resulting in plenty of situations where charges and cost are accrued for something the shipper cannot control nor have influence over. But the cost is accrued and someone has to pay. That usually ends up being the shipper.”

Correspondence, allegations, and supporting documents can be sent to the Commission via: FF28@FMC.Gov

Photo: Seattle, a major US port.

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