Addressing Supply Chain Bottlenecks:
Practices of Ocean Carriers and Marine Terminal Operators
on Empty Container Return, Early Return Date, and Container Pickup (Notice of Availability)
Commissioner Rebecca F. Dye seeks reaction from the shipping public on three proposals to increase the performance of the U.S. international ocean freight delivery system by reforming the practices of international ocean carrier and marine terminal operators in the Ports of Los Angeles and Long Beach and the Port of New York and New Jersey:
- Container Return;
- Early Return Date; and
- Container Pickup (Notice of Availability).
Currently, these three practices create bottlenecks in the U.S. international ocean supply chain that contribute to congestion and unreasonable demurrage and detention charges. Increasing clarity and predictability in these practices will prepare the U.S. international ocean freight delivery system to handle future cargo surges and dislocations. The proposals outlined in this initiative were developed based on Commissioner Dye’s years of experience with Nonadjudicatory Fact Finding Investigations, industry leader engagement in Federal Maritime Commission Supply Chain Innovation Teams (Innovation Teams), and the work of the National Shipper Advisory Committee (NSAC) and the Council on Port Performance of the Port of New York and New Jersey (CPPNY/NJ).
I. Container Return Proposal
For clarity and predictability, reasonable practices with respect to container return must include the following:
- Containers must be returned to the terminal of original pickup, facilitating the pickup of a new load.
- Truckers must have an option to return empty containers to another location to facilitate double moves.
- In rare cases, where it is not possible for a trucker to return a container to the terminal of original pickup, notice to truckers of the new container receiving terminal must occur no later than 12PM the previous day.
- Any requirement for an appointment at a new receiving terminal must be waived.
II. Early Return Date Proposal
For clarity and predictability, when an ocean carrier changes the Earliest Return Date (ERD), reasonable practices require the following:
- The ERD date applicable for the shipment will be the one in effect at the time the empty container has been picked up from the terminal.
- FMC Supply Chain Innovation Team engagement surrounding this proposal will also involve related detention and demurrage charges.
III. Notice of Container Availability for Pickup Proposal
For clarity and predictability, reasonable practices require:
- Ocean carriers and marine terminals (MTOs) must coordinate information to provide shippers with an electronic notice that a container is available for pickup;
- Free time does not start until a container is accessible and available for pickup;
- Free time and clocks stop if a container becomes non accessible and unavailable for pickup; and
- Availability includes the physical availability of the container to be picked up within a reasonable time period by the shipper or trucker.
All three reforms proposed are designed to increase systemic clarity and predictability, and to mitigate recurring supply chain bottlenecks involving container return, early return date, and availability of containers for pickup. Commissioner Dye encourages suggestions from the shipping public regarding these proposals.
Reactions or questions may be submitted to Commissioner Dye through John Moran at firstname.lastname@example.org until September 15, 2023. The suggestions will help inform the discussions of Innovation Teams convened this fall. Please note that any submittals will be treated as publicly available information under applicable rules and regulations.
After receiving suggestions and reactions from the shipping public on these three proposals, Commissioner Dye will convene Innovation Teams to consider improvements to these industry practices. Based on her past experience with Innovation Teams, Commissioner Dye believes that, rather than regulatory solutions, commercial solutions developed by engagement among industry leaders will produce reforms that are practicable in the complex and dynamic U.S. international ocean freight delivery system.
In 2015, Commissioner Dye held the first meetings of Innovation Teams to consider U.S. international ocean supply chain reliability and resilience, the need for a National Port Information System, and the significance of an electronic notice of container availability for pickup.
In Fact Finding 28, Conditions and Practices Relating to Detention, Demurrage, and Free Time in International Oceanborne Commerce, Innovation Teams composed of industry leaders considered commercially viable demurrage and detention approaches and a notice of cargo availability for pickup.
Fact Finding 29 employed national and regional Innovation Teams to discuss supply chain challenges, including the practices of empty container return and earliest return dates.
On August 31, 2022, the National Shipper Advisory Committee (NSAC), established by Congress pursuant to a recommendation by Commissioner Dye following Fact Finding 28, recommended that the Commission codify regulation in concert with the Interpretive Rule that prohibits unreasonable application of charges on containers for ERD changes. This process recommendation, which is the basis for the proposal on Early Return Date (ERD), is designed to improve certainty for exporters with respect to the issuance of ERDs and to remove confusion about responsibility and notification procedures.
Finally, a recommendation by the Council on Port Performance of the Port of New York and New Jersey provided the basis for the proposal on container return. The recommendation was refined through Innovation Team discussions among industry executives during Fact Finding 29.