What Is the FMC Doing About Ongoing Detention, Demurrage, and Container Returns?
The pandemic continues to throw the global supply chain for loops as industries and regulators across the globe try to adjust to the “new norm” the world is facing. One of the “new norms” many have been adjusting to recently is an increase in demurrage and detention fees that are of questionable legality.
Luckily, the Federal Maritime Commission (FMC), an independent federal agency responsible for regulating the US international ocean transportation system, has decided to start throwing its weight around in an effort to put a stop to these fees. On the 17th of February this year, the FMC announced they “will issue information demand orders to ocean carriers and marine terminal operators (MTOs) to determine if legal obligations related to detention and demurrage practices are being met.”
While an information demand order isn’t exactly the “big, huge step” FMC Commissioner Rebecca Dye spoke of in a recent interview, it is a positive step in the right direction towards putting a stop to excessive fees that are likely in violation of 46 USC Section 41102(c). Those who feel they have been levied fees that violate § 41102(c) are instructed to submit complaints and supporting evidence to the Bureau of Enforcement, which can be emailed at BOE@FMC.Gov.
The information demand orders are being issued to “ocean carriers operating in an alliance and calling the Port of Los Angeles, the Port of Long Beach, or the Port of New York & New Jersey.” Carriers and MTOs will need to offer up the details of their policies and practices as they pertain to container returns and container availability for exporters.
As of now, only vague threats of “hearings, Commission enforcement action or further rulemaking” are being attached to these demand orders. Hopefully, most carriers and MTOs would rather provide the requested information than risk the wrath of the FMC. Whether this development will produce noticeable results is still left to be seen.
Logistics is complicated, there are so many moving parts which means many things can go wrong and demurrage and detention fees are just one of the possible issues. Why try to manage all the moving parts of a supply chain by yourself when you can have a reliable logistics partner like ClearFreight help. We have decades of experience managing all the moving parts of supply chains and we pride ourselves on make logistics less complicated for our clients. Contact us today to tell us about your supply chain and hear how we can make it easier.