IAM Testifies Before Federal Maritime Commission on Detention and Demurrage Petition

January 18, 2018

This week, IAM joined nearly a dozen other shipper-based companies, and provided testimony to the Federal Maritime Commission in support of the Detention and Demurrage Petition, currently under consideration. IAM's involvement with the petition filers, The Coalition for Fair Port Practices (CFPP), goes back nearly two years, when informal discussions began among shippers and other impacted by detention and demurrage fees. The Commission asked that a petition be submitted so they could formally consider detention and demurrage practices.

While additional free days or time allocated to shippers for issues related to congestion, weather, labor strikes has the potential to assist the household goods industry, IAM requested and that a focus be placed on delays and costs associated with government inspections. IAM's testimony focused on the unique aspects of household goods moving industry. As one-time shippers of household goods, the potential for increased intensive exams by Customs and Border Protection (CBP) both leaving and entering the ports is high. As non-commercial not for resale cargo, the variety of contents also increases the chance that an intensive exams will occur. IAM requested the Commission consider including either maximum or flat fees for costs associated with government ordered intensive exams as part of any policy statement, as a way to provide greater financial certainty to shippers of household goods and their customers.

Carriers, and other port-based interests also testified to the Commission, coming out against any policy statement potentially limiting their ability to assess detention and demurrage charges. According to their slate of witnesses, limits placed on detention and demurrage fees would reduce competition, and lay outside of the FMC's jurisdiction. Other points made by petition opponents were that demurrage was only in place to speed through the loading and unloading process of cargo. In recognition of some delays, they stated that fees charged to BCOs are often reduced or waived. Opponents also cited the large choice of carriers that shippers can choose from. The CFFP and several witnesses argued the previous day that this is not the case, depending on where the cargo is coming from, and recent consolidation of carriers to choose from.

IAM plans to provide follow-up testimony to the Commission next week, further emphasizing our points on fees, inspection rates and other challenges presented to the household goods moving industry.

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