|NCBFAA NVOCC Subcommittee Chair Testifies at FMC Hearing
The FMC held hearings last week on Docket P4-16, concerning the petition of the Coalition for Fair Port Practices for Rulemaking, of which NCBFAA is a member. The Commission's two-day hearing examined issues related to detention, demurrage, and per diem practices of marine terminal operators and container ship lines. Acting Chairman Michael A. Khouri said the Commission will meet in closed session to discuss next steps soon after the hearing record is closed. Further information may be submitted for the record through Friday, January 26, 2018.
Rich Roche, Vice President of International Transportation at Mohawk Global Logistics and Chairman of NCBFAA’s NVOCC subcommittee, testified at the hearing and requested the agency establish guidelines or a policy statement making it clear that the carriers and MTOs should extend free time during periods of congestion at the terminal that make it difficult for NVOCCs and BCOs to pickup or deliver containers. In his testimony, Roche stated that he was here “not to eliminate Demurrage & Detention (D&D) - but rather to seek a solution that such charges may be applied fairly - with more transparency in their application - and more standardization where additional free time should be granted.” He agreed that “D&D as it exists today is designed to incentivize rapid pick-up and return of containers with punitive consequences for those that don’t perform,” and noted that the system “works most of the time.” Where the problem lies, according to Roche, is during deviations from normal circumstances. “Congestion from any cause (labor, system crash, vessel bunching, and weather), or terminal glitches (like lost containers, closed sections of the yard, and in some cases equipment shortage), may contribute to D&D being assessed unfairly due to circumstances beyond our control.”
"This hearing was informative and helped bring broader substance and clarity to the positions of the petitioners and those who oppose their filing. I appreciate the time the witnesses gave us and their excellent statements," Acting Chairman Khouri said. "This is a very complex issue that presents difficult choices. The question to be resolved is if the Commission, with a judicious hand, can help make things better, though we recognize, we will never be able to solve all the issues associated with the timely handoff of the container from carriers to shippers."
In total, 26 different individuals testified on seven different panels during the hearing. Panels appearing before the Commission on Tuesday, January 16, represented the coalition that filed the petition, shippers, and intermediaries, all of whom testified in support of the petition. Panels for the second day represented the drayage industry, ocean carriers, and ports and terminals. The drayage industry witness supported the petition, while the witnesses on the carriers, ports, and terminals panels all testified in opposition to the petition.
"As the Commission considers the Petition of the Fair Port Practices Coalition, my focus is how demurrage and detention approaches can optimize, not diminish, the performance of the American international freight delivery system. Improvements to demurrage and detention business processes may require closer cooperation and information visibility among ocean carriers, marine terminals, and American importers and exporters," said Commissioner Rebecca Dye.
Commissioner Daniel Maffei commented that "Government can help the most and hinder the least when all sides are well represented. I want to compliment the witnesses who represented many areas of the industry, from shippers, truckers and intermediaries to carriers and port operators, and were all well prepared to answer the challenging and substantive questions that I and my colleagues asked. While no one may be completely happy with what we ultimately decide, the probability that we will be acting in the best interest of both international commerce and our country is greatly increased by the strong participation of all these groups."