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Commission Concludes Hearing on Petition P4-16

January 19, 2018

The Federal Maritime Commission concluded a two day hearing Wednesday that 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.

The matters at the crux of the hearing were raised in a petition filed on December 7, 2016 by the Coalition for Fair Port Practices, an organization of trade associations representing shippers, ocean transportation intermediaries, and domestic transportation companies.

The hearings were called by the Commission to gather information beyond what was presented in written comments filed in the docket, and to provide Commissioners with the benefit of direct questioning and dialog with the witnesses.

"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."

Following receipt of the petition, the Commission issued a Request for Comments on December 20, 2016 that closed on February 28, 2017, but continued to accept comments through April 2017. Over the summer of 2017, staff reviewed the comments filed in the docket, presenting its findings to the Commission during the regularly scheduled September 2017 meeting. On November 16, 2017, the Commission issued a Notice of Public Hearing announcing the hearing conducted this week.