THE
International Federation of Freight Forwarders Association (FIATA) is calling on container shipping lines to review their demurrage and
detention charges to ensure that they
are not unreasonably applied during the coronavirus pandemic.
Demurrage
pertains to the time an import container sits in a container terminal, with carriers responsible for collecting penalties
on behalf of the marine terminals, while detention
relates to shippers holding containers for too long outside the marine terminals,
American Shipper reported.
The purpose of these charges, which
generally range from US$150
to $350 per container per day in the US, is to incentivize a quick turnaround of container equipment by shippers
to the carriers.
"FIATA calls upon shipping lines
and terminals to exercise restraint in their demurrage and detention charges
and practices, taking into consideration the unprecedented difficulties faced
by the freight forwarding industry and other stakeholders amid disruptions in
the supply chain," the Switzerland-based organization said in a statement.
FIATA
praised the ocean carrier industry for waiving certain demurrage and detention
charges during the extended Chinese New Year holiday due to the flu outbreak in
China.
However, in other parts of the
world, shippers and their transportation intermediaries are now finding it
increasingly difficult to retrieve and drop off containers at marine terminals
without incurring these charges due to unscheduled covid-19-related terminal
slowdowns or temporary closures.
The assessment of demurrage and
detention charges, even before the spread of the coronavirus, has been a
contentious issue for shippers, forwarders and their drayage service providers.
"There is no logic in
enforcing a charge which is supposed to motivate the importer to pick up, or
return, a container in a timely manner if the port or terminal is not able to
comply with the delivery request," said FIATA's
Working Group Sea chairman Jens Roemer.
With myriad government lockdowns
and restrictions to control the spread of covid-19, forwarders are doing their
best to quickly load and unload containers to limit detention and demurrage
charges from the ocean carriers and marine terminals, FIATA said.
"Our agriculture and forest
products exporters are still facing an onslaught of demurrage and detention charges,
even with all the blank sailings by the carriers," said Agriculture Transportation
Coalition (AgTC) executive director Peter Friedmann.
"Terminals are closed or
have limited hours, carriers come in off-schedule, state governments are
restricting 'non-essential' cargo supply chains, often leading to inability to
meet free-time requirements."
FIATA said it supports the US Federal Maritime
Commission's (FMC) proposed rule,
which provides guidance under the Shipping Act on what the agency will consider
to be fair and reasonable practices for ocean carriers and marine terminals to
assess demurrage and detention fees on shippers.
In a March 16 letter, 67 American
shipper groups urged the FMC to finalise the rule, which they say is especially
important during the covid-19 pandemic.
Mr Friedmann, whose association
was one of the signatories to the letter, said "it's unconscionable that
it has taken the commission six months to review the overwhelmingly supportive
comments on the proposed rule."
He told American Shipper the AgTC
and other associations has asked the White House to intervene and generate some
urgency at the FMC to finalize the demurrage and detention practices rule.
Source : HKSG.
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