FMC needs formal complaint to examine detention and demurrage fees

One year after ports were snarled during ILWU contract negotiations, FMC has yet to receive complaint or petition.     Mario Cordero, the chairman of the Federal Maritime Commission (FMC), told shippers last week that his agency needs a formal complaint or petition if it is going to investigate the fairness of detention and demurrage charges imposed by container terminals on the West Coast when they became highly congested during the 2014-2015 contract negotiations between the International Longshore and Warehouse Union and Pacific Maritime Association.
   Many shippers have complained about how port congestion made it impossible for them to retrieve and return containers in a timely way, in addition to being hit with unfair charges, but Cordero said the FMC “cannot act with the benefit of facts and evidence of harm.”
   “Last year, we heard loudly and clearly from multiple parties about detention and demurrage fees being charged as a result of port congestion that appeared to be no fault of the shippers,” Cordero said last week in a press release summarizing remarks he made to the Coalition of New England Companies for Trade (CONECT).
    “These complaints caught our attention, but they fell short of enabling us to initiate the process to formally examine the practices of carriers and terminal operators,” he added. “To take that step, the FMC needed to receive a complaint or a petition and we made that known as plainly as possible to all concerned parties. One year later, we still have not received a filing from any shipper or association.”
    “The FMC wants to hear from its constituents regarding what issues they are facing in terms of operating their supply chains,” Cordero said. “It is particularly important to know what sensitivities shippers face in moving cargo internationally and when there is cause, we are willing to take action.”
    Cordero noted in his remarks that he often hears anecdotal evidence of problems associated with international oceanborne cargo movements, but said such informal complaints do not automatically lead to a circumstance where the Commission can formally delve into the root of the allegations.
    Cordero also applauded a hearing last week by the House Subcommittee on Coast Guard and Maritime Transportation that looked at the verified gross mass amendments (VGM) to the Safety of Life at Sea (SOLAS) convention that go into effect on July 1.
    He noted the FMC “does not have a role in promulgating and implementing the SOLAS VGM amendment,” but noted the agency hosted a forum on the issue in February.
     “In coming days and weeks, I will reach out to individuals with the authority to make decisions to determine if we can bridge differences on SOLAS VGM amendment implementation,” Cordero said.
    “Though the July 1st deadline is fast approaching, I remain optimistic that the Coast Guard, cargo owners, and transportation providers can find a solution that addresses the concerns of all parties. I encourage people to redouble their efforts toward achieving an outcome that does not lead to export shipments becoming distressed,” he said.