As discussed in our March 13, 2015 blog post, due to the West Coast Port slowdown and other factors, businesses that import and export goods face the significant risk of carriers, of all kinds, attempting to impose the costs of the slowdown and congestion onto businesses via invalid demurrage charges.

During a recent hearing before the Subcommittee on Coast Guard and Maritime Transportation of the United States House of Representatives Committee on Transportation and Infrastructure, Federal Maritime Commission Chairman Mario Cordero expressed significant concern about carriers imposing invalid demurrage and detention charges on parties shipping goods. Specifically, Chairman Cordero stated:

At the Port events, and through additional discussions, the Commission has heard significant concerns with how marine terminal operators and ocean common carriers are assessing demurrage charges when shippers are not able to retrieve containers from the terminals due to congestion delays through no fault of their own. With disappointing frequency, the Commission is receiving complaints by shippers about how shippers are repeatedly told that they may not retrieve a container due to on-dock congestion or delays at the gate. Worse yet, some shippers find out that once the container is finally made available, the carrier and marine terminal operator will not release it until the shipper pays demurrage for not picking up the container before free-time expires. The Commission is currently evaluating these practices, which many shippers allege are unfair, and will continue to watch out for American shippers and consumers.

While the Federal Maritime Commission regulates ocean carriers, it does not regulate rail carriers or truck carriers. Moreover, filing a complaint with the Federal Maritime Commission is not guaranteed to resolve a dispute over demurrage charges purportedly incurred by your business that you feel are invalid or false.

If you or your business are facing higher than usual demurrage charges that were purportedly incurred during the West Coast port slowdown, it is in your interest to review them in detail to ensure that they are legitimate.