The Federal Maritime Commission (FMC) is expanding an investigation to determine if ocean carriers are using illegal policies and practices related to detention and demurrage, container return and container availability for U.S. export cargo at the nation’s two largest port complexes–the twin ports of Los Angeles and Long Beach, and the Port of New York & New Jersey.
This follows a request from a coalition of trade organizations, including the American Apparel & Footwear Association, National Retail Federation and Footwear Distributor & Retailers of American urging the FMC to “explore all available powers and authority to immediately suspend detention and demurrage charges, which are being unfairly and unreasonably assessed in the Ports of Los Angeles and Long Beach, as well as the Port of New York & New Jersey by ocean carriers and marine terminals.”
The group said its members have collectively paid more than $150 million in charges this year in those ports due to the “massive congestion created by record setting volumes, coupled with a shortage of both skilled labor and available chassis.”
In Southern California, the “Pool of Pools” chassis agreement has been massively oversubscribed, the coalition said. leading to the biggest chassis shortage in the history of the San Pedro Bay port complex. Despite efforts by the shipping and trucking industry to promote more dual-transactions to allow chassis to be recycled during the pick-up and drop-off of containers, the ocean carriers have refused to provide advanced notification of empty receiving locations to allow truckers and marine terminals to partner on increasing dual-transactions throughout the port complex.
Chassis shortages have also reached critical mass at the Port of NY & NJ, where dwell times have nearly tripled in recent weeks, the letter said.
The commission’s supplemental order expands the authority of Fact Finding 29, “International Ocean Transportation Supply Chain Engagement,” and authorizes Commissioner Rebecca F. Dye as the designated fact finding officer to investigate ocean carriers operating in alliances and calling on the Port of Long Beach, the Port of Los Angeles, or the Port of New York and New Jersey.
The expanded investigation will seek to determine if the policies and practices of those shipping companies related to detention and demurrage, container return and container availability for U.S. export cargoes violate U.S. Code 41102(c) involving “practices in handling property. The code sates that “A common carrier, marine terminal operator or ocean transportation intermediary may not fail to establish, observe and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing or delivering property.”
“The time has come to resolve the most serious impediments to port performance,” Dye said. “I’d like to thank my fellow commissioners for their support of the supplemental order for Fact Finding 29, as I focus the investigation on the extreme conditions in the Ports of Los Angeles, Long Beach, and New York/New Jersey.
The FMC said it has a “compelling responsibility to investigate the situations that currently exist in our major port gateways. The commission is concerned that certain practices of ocean carriers and their marine terminals may be amplifying the negative effect of bottlenecks at these ports and may be contrary to provisions in the Shipping Act of 1984.”
The commission said the “potentially unreasonable practices of carriers and marine terminals regarding container return, export containers, and demurrage and detention charges” at those ports “present a serious risk to the ability of the United States to handle trade growth.”
“Removing the obstacles to port performance allows ocean carriers, ports and marine terminals, truckers, American importers and exporters, and every other business engaged in freight delivery to grow and prosper,” the FMC added.