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Statement by Commissioner Bentzel on the Commission’s Demand Order

Posted

I strongly support the FMC moving forward on the information demand orders.  The impact of COVID-19 has clearly taken a toll and disrupted everyday life in our country, and our maritime operations have not been spared.  Today, in the news, it was reported that over 60 large ships lay at anchorage waiting for berth space at the LA/Long Beach port complex.

Many of the challenges to our supply chain have been unforeseeable such as the cargo surges that have created congestion on the waterside and landside on the west coast. I can understand that this would be a critical component that governs the responses of all parties to the supply chain. However, the level of concern that has been expressed to our Agency mandates that we look in further detail at allegations that are being made.

In this time of operational duress, it is important that ocean carriers, marine terminal operators, and shippers honor their responsibilities in the legal obligations related to detention and demurrage. Detention and demurrage are intended to provide an incentive for the pickup of cargo, and the redelivery of equipment to ensure efficient operation, not to function as a separate revenue stream when operations break down.

While I am concerned about issues surrounding the implementation of detention and demurrage, I am very concerned about the potential that shipping lines are intentionally avoiding providing export of U.S. goods and manufactures in the rush to get empty cargo containers to Asia to provide carriage of imports.

I am also concerned about the challenges that we face related to the provision of equipment necessary for intermodal transport. Why do we not have enough containers and chassis to carry demand? What has this meant in the way of rate increases for smaller shippers while the substantial delays for larger shippers that have market power to demand services in a constrained market environment? We need to better understand why this vital operational equipment has not been available.

I believe that we are taking the right approach building on Commissioner Dye’s Fact Finding 29 Investigation and issuing questions related to refusals to deal, detention and demurrage, and availability of equipment.  I look forward to getting more information from the shipping public on the on-going challenges that our nation faces in securing overseas trade.

Carl W. Bentzel is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.