Covid 19: Unfair Demurrage, Detention Fees Levied on Shippers

 U.S. shippers and truckers are being hit with detention and demurrage fees for reasons not of their own making.

Fees terminals charge for not picking up shipping containers of goods from the port beyond the “free time” allotted after being offloaded from a ship. The fee is sometimes referred to as “storage.”

Fees carriers charge for not returning empty shipping containers from a shipment to the port within an allotted number of days. The fee is also call a “per diem charge.” The number of days shippers are allowed to keep containers before returning them to the port can vary and are called “free days.”

Both detention and demurrage fees tend to be cumulative over a period and could become severely expensive and burdensome.

In the first quarter of this year, shippers in US were hit with coronavirus related detention fees when a rash of blank sailings and restricted port hours for COVID-related reasons often made it impossible for shippers and truckers to return empty containers on time.

The two trucking associations are now urging terminal operators and shipping lines to suspend detention and demurrage charges.

“Shippers and truckers are being put on the hook for millions of dollars of additional detention and demurrage charges, despite their inability to return empty containers or pick up import cargo,” they argue. “The immediate and fair course of action is to immediately suspend detention and demurrage.”

Congestion at the Ports of Los Angeles and Long Beach is especially bad right now, but congestion is being seen at ports all along the west coast and at east coast ports as well.

Port of New York and New Jersey officials announced Monday they are “taking extra measures to keep the supply chain fluid.”

According to the port, these efforts include keeping marine terminals open on holidays; adding extra hours of operation on nights and weekends; infusing extra chassis into the network; working overtime to keep chassis units roadworthy; and adding empty railcars as well as trains into the intermodal network.

On the west coast, where the Ports of Los Angeles and Long Beach handle more cargo volume than any other ports in the U.S., the struggle to keep cargo moving is not going well, evidence by the opening lines of an article by Ian Putzger in the Loadstar:

The chronic congestion that has plagued the US port complex of Los Angeles and Long Beach since the summer is going from bad to worse.

The California Trucking Association (CTA)  and Harbour Trucking Association (HTA) described the movement of cargo through the two ports this week as “nearing complete gridlock”.

The main point of the article is how the CTA and HTA are calling for a halt to the detention and demurrage charges that shippers and truckers are being hit with in the middle of this bad congestion:

The CTA and HTA say they will take their case one step further if they don’t see progress soon, intending to call on the US Federal Maritime Commission [FMC] to intervene.

While these current ones seem especially egregious, shippers and truckers have long complained about unfair demurrage and detention fees. Going to the FMC with demurrage and detention fee complaints is no new thing.

In fact, a year ago the FMC announced it would “address detention and demurrage charge issues” by adopting a set of recommendations Commissioner Rebecca Dye made. Commissioner Dye led an 18-month fact finding investigation into these often-unfair demurrage and detention fees. Unfortunately, little action has been seen from the FMC on the issue since then.

 

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