Gemini Shippers Group joined almost 50 associations in a letter to the Federal Maritime Commission seeking relief from Demurrage and Detention changes in the wake on continuous operational challenges in Americas largest ports. A copy of the complete letter can be downloaded here: Coalition Letter to FMC 11.16
November 16, 2020
Chairman Michael Khouri & Commissioners
Federal Maritime Commission
800 North Capitol Street, N.W
Washington, D.C. 20573
RE: REQUEST FOR SUSPENSION OF DETENTION & DEMURRAGE AT SAN PEDRO BAY AND NEW YORK/NEW JERSEY PORTS
Honorable Commissioners:
On behalf of the undersigned trade associations representing importers, exporters,
and their supply-chain partners, we respectfully ask you 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. Collectively, our members have paid well over $150 million in
unreasonable detention and demurrage charges this year in the twin Southern
California ports and the port of New York & New Jersey due to the massive
congestion created by record setting volumes, coupled with a shortage of both
skilled labor and available chassis. We believe the assessment of detention and
demurrage in this situation goes against the heart of the Interpretive Rule on
Demurrage and Detention which the Commission issued last year.
In Southern California, the “Pool of Pools” chassis agreement has been massively
oversubscribed, 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. In a letter
sent to the Ports of Los Angeles and Long Beach, dated August 25, 2020, a similar
coalition of 40 organizations requested ocean carriers to provide at least 48 hours
advanced notice of empty receiving locations and for marine terminals to guarantee
those appointments. Thus far, no ocean carrier has been willing to provide truckers
and shippers with the data necessary to mitigate the challenges in the San Pedro
Bay. Subsequent one on one meetings between coalition members and ocean
carriers yielded no tangible results and a refusal to help solve these issues.
Chassis shortages have also reached critical mass at the Port of NY/NJ, where dwell
times have nearly tripled in recent weeks. Restrictions on empty returns imposed by
ocean carrier alliances further exacerbate the problem, with containers redirected
at the whim of steamship lines, resulting in additional truck trips for motor carriers
as they are forced to reposition equipment to locations other than the point of
origin, for no additional compensation, but rather, at their own expense of time and
labor.
In addition, due to the shortage of skilled ILWU labor, ocean carriers have fallen
woefully short of their obligation to evacuate empty containers from marine
terminals to create more space on their docks. Meanwhile, they have continued to
unload loaded import containers creating congestion at the terminals. This has
resulted in restrictions by marine terminals further thwarting the ability to
terminate empty containers or pickup imports during the allotted free time. Also,
ocean carriers are canceling export bookings leading to further trade deficits and
creating hardships for American exporters.
The trucking community servicing the San Pedro Bay ports are working diligently to
maintain cargo fluidity, however through no fault of the truckers or their customers,
the hurdles to do so have become insurmountable and there looks to be no
consideration or reprieve from the detention and demurrage charges that shippers
and truckers cannot avoid. The restrictions on empty container returns, created by
empty-in appointments and ocean carriers exceeding their empty allocations on
terminal, have created an increase in demurrage due to the inability to free up
chassis via an empty container termination or dual transaction impeding the ability
to perform single import container pickups.
In the short term, we again ask for a suspension of these unreasonable detention
and demurrage charges in the Ports of Los Angeles, Long Beach, New York & New
Jersey due to current conditions and the lack of adoption of the FMC interpretive
rule guidelines, which would have helped mitigate these issues. We would further
ask that the Commission review and disallow carriers from filing or collecting any
surcharges for congestion, trucking or equipment for moving in and through these
ports until they have made a constructive action to remedy the problems.
In the long-term, we ask the FMC to use the interpretive rule on detention and
demurrage as a template for rulemaking. The lack of participation by the ocean
carriers is glaring, and the commercial and operational benefits they were afforded
through the shipping alliances have created commercial and operational hardships
for the rest of the supply-chain.
We all know that the COVID-19 pandemic has created disruption throughout the
supply chain. However, as the U.S. economy and companies continue to recover,
they should not have to be worried about congestion and additional costs that will
further impact their businesses and recovery efforts. We must work collectively to
address these systemic issues, which the FMC is well aware of through previous
investigations. The FMC must take action to support the interests of U.S. companies
and consumers to ensure that the carriers are not imposing unfair costs on
American exporters, importers or consumers.
Respectfully,
Harbor Trucking Association
California Trucking Association
American Trucking Association
Intermodal Carriers Conference
Agriculture Transportation Coalition
National Retail Federation
Gemini Shippers Group
American Cotton Shippers Association
Association Food Industries
Association of Bi-State Motor Carriers
Autocare Association
California League of Food Producers
California Retailers Association
CAWA
Coalition of New England Companies for Trade
Columbia River Customs Brokers & Forwarders Association
Customs Brokers & International Freight Forwarders Association of Washington State
Customs Brokers and Forwarders of Northern California
Dairy Farmers of America
Fashion Accessories Shippers Association
Fashion Jewelry & Accessories Trade Association
Footwear Distributors and Retailers of America
International Association of Movers
International Housewares Shippers Association, Inc.
Juvenile Products Manufacturers Association
Leather & Hide Council of America
Los Angeles Customs Brokers & Freight Forwarders Association
Meat Import Council of America
National Hay Association
National Industrial Transportation League
National Onion Association
NCBFAA
NCBFAA Shippers Association, Inc.
New Jersey Motor Truck Association
North American Meat Institute
NY/NJ Foreign Freight Forwarders and Brokers Association
Pacific Coast Council of Customs Brokers and Freight Forwarders Associations. Inc.
Pacific Northwest Asia Shippers Association
Retail Industry Leaders Association
San Diego Customs Brokers Association
Specialty Soya & Grains Alliance
Tea Association of the U.S.A., Inc.
Toy Shippers Association, Inc.
Transportation Intermediaries Association
Travel Goods Association
U.S. Forage Export Council
United Fresh Produce Association
USSA Global
Wine and Spirits Shippers Association Inc.
Cc:
Members of Congress
Gavin Newsom, Governor of California
Andrew Cuomo, Governor of New York
Phil Murphy, Governor of New Jersey
Eric Garcetti, Mayor of Los Angeles
Robert Garcia, Mayor of Long Beach
Gene Seroka, Port of Los Angeles
Mario Cordero, Port of Long Beach
Sam Rouda, Port of New York, New Jersey
