THE International Federation of Freight
Forwarders Association (FIATA) is calling on container shipping lines to
review their demurrage and detention charges to ensure that they are
not unreasonably applied during the coronavirus pandemic.
Demurrage pertains to the time an import
container sits in a container terminal, with carriers responsible for
collecting penalties on behalf of the marine terminals, while detention
relates to shippers holding containers for too long outside the marine
terminals, American Shipper reported.
The purpose of these charges, which generally range from US$150 to $350
per container per day in the US, is to incentivize a quick turnaround of
container equipment by shippers to the carriers.
"FIATA calls upon shipping lines and terminals to exercise restraint in
their demurrage and detention charges and practices, taking into
consideration the unprecedented difficulties faced by the freight
forwarding industry and other stakeholders amid disruptions in the
supply chain," the Switzerland-based organization said in a statement.
FIATA praised the ocean carrier industry for waiving certain demurrage
and detention charges during the extended Chinese New Year holiday due
to the flu outbreak in China.
However, in other parts of the world, shippers and their transportation
intermediaries are now finding it increasingly difficult to retrieve and
drop off containers at marine terminals without incurring these charges
due to unscheduled covid-19-related terminal slowdowns or temporary
closures.
The assessment of demurrage and detention charges, even before the
spread of the coronavirus, has been a contentious issue for shippers,
forwarders and their drayage service providers.
"There is no logic in enforcing a charge which is supposed to motivate
the importer to pick up, or return, a container in a timely manner if
the port or terminal is not able to comply with the delivery request,"
said FIATA's Working Group Sea chairman Jens Roemer.
With myriad government lockdowns and restrictions to control the spread
of covid-19, forwarders are doing their best to quickly load and unload
containers to limit detention and demurrage charges from the ocean
carriers and marine terminals, FIATA said.
"Our agriculture and forest products exporters are still facing an
onslaught of demurrage and detention charges, even with all the blank
sailings by the carriers," said Agriculture Transportation Coalition
(AgTC) executive director Peter Friedmann.
"Terminals are closed or have limited hours, carriers come in
off-schedule, state governments are restricting 'non-essential' cargo
supply chains, often leading to inability to meet free-time
requirements."
FIATA said it supports the US Federal Maritime Commission's (FMC)
proposed rule, which provides guidance under the Shipping Act on what
the agency will consider to be fair and reasonable practices for ocean
carriers and marine terminals to assess demurrage and detention fees on
shippers.
In a March 16 letter, 67 American shipper groups urged the FMC to
finalise the rule, which they say is especially important during the
covid-19 pandemic.
Mr Friedmann, whose association was one of the signatories to the
letter, said "it's unconscionable that it has taken the commission six
months to review the overwhelmingly supportive comments on the proposed
rule."
He told American Shipper the AgTC and other associations has asked the
White House to intervene and generate some urgency at the FMC to
finalize the demurrage and detention practices rule.
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