Commission Orders Formal Investigation in Detention & Demurrage Case
The Federal Maritime Commission voted to launch an investigation, headed by Commissioner Rebecca Dye, focused on the practices of vessel operating common carriers and marine terminal operators related to detention, demurrage, and per diem charges.
As the designated Investigative Officer, Commissioner Dye will have broad authority to conduct Fact Finding 28, including the power to issue subpoenas, to hold public and non-public sessions, and to require reports. Under this Order, she is charged with making recommendations for Commission action including investigations of prohibited acts; enforcement priorities; policies; rulemaking proceedings; or other actions warranted by the record developed in the proceeding.
Fact Finding 28 stems from a petition (Petition P4-16) filed at the Commission by the Coalition for Fair Port Practices. In January, the Commission held a two day hearing that explored issues raised in the petition by soliciting testimony from shippers, ocean transportation intermediaries, ocean carriers, truckers, and marine terminal operators.
Acting Chairman Michael A. Khouri said “The Coalition raised substantive issues in both their petition and their testimony at our January hearing investigating carrier and terminal detention and demurrage practices. Various alleged practices were described that—without countervailing or explanatory testimony and evidence—would be troubling from my perspective. However; without any filed complaints by cargo stakeholders, where the crucible of adversary proceedings can bring light and transparency to such practices, I supported this investigatory fact finding so as to more fully develop a tested factual record. Commissioner Dye is uniquely qualified to lead Fact Finding 28, particularly given the work she has done to date examining supply chain reliability and resilience. I have every confidence in the work she will do.”
A final report of Commissioner Dye’s findings and recommendations is due to the Commission no later than December 2, 2018.
Commissioner Dye commented, “I appreciate the confidence of the Commission and look forward to working with our stakeholders to strengthen the Nation’s freight delivery system and increase American competitiveness.”
Commissioner Daniel Maffei stated, “While many questions remain after the hearing, I do believe it effectively established that the practices surrounding detention and demurrage charges can be out-of-date, confusing, inconsistent, and, in my view, often unfair. Today the Commission unanimously takes the first step towards corrective action through a comprehensive Order of Investigation that will bring all the relevant facts to light.”
As the Investigative Officer, Commissioner Dye will examine detention, demurrage, and per diem practices generally, but at a minimum, she will evaluate five key issues:
- Whether the alignment of commercial, contractual, and cargo interests enhances or aggravates the ability of cargo to move efficiently through U.S. ports
- When has the carrier or MTO tendered cargo to the shipper and consignee
- What are the billing practices for invoicing demurrage or detention
- What are the practices with respect to delays caused by various outside or intervening events
- What are the practices for resolution of demurrage and detention disputes between carriers and shippers