Ag shippers seek more accountability from ocean carriers on container availability

By Bruce Abbe, strategic advisor for trade and transportation

The national Agriculture Transportation Coalition (AgTC), along with the Specialty Soya and Grains Alliance (SSGA), continues to press for reforms to set fair and appropriate practices in the ocean container shipping industry when detention and demurrage penalties get applied at port terminals when containers are not picked up or arrive back within allotted time frames.

Last week AgTC, of which SSGA is an active member, garnered news attention for developing a set of draft service contract guidance provisions that its members may seek to include in their ocean carrier contracts. AgTC and SSGA shipper members include both exporter container shippers and freight forwarder/NVOCC logistics members who serve exporters, and negotiate annual contracts with ocean carriers.

“This contract language is proposed as a means for our members to ensure that their ocean carriers spell out why demurrage and detention or per diem fees are justified, not just hand out blanket bills to exporters and importers and expect them to pay,” Peter Friedmann, executive director of AgTC, told American Shipper/Freightwaves.

The collective effort to reform per diem penalty abuses at port terminals has been going on since at least 2016, when the Coalition for Fair Port Practices (supported by SSGA) filed a petition with the Federal Maritime Commission (FMC) requesting that regulations be adopted to prevent unfair assessment of penalties – particularly when the shippers had no ability to meet the deadlines due to problems at the terminals or in the supply chains that were beyond their control. The coalition includes a wide range of container cargo shippers, including national retailers and importers as well as exporters.

After an extensive Fact Finding investigation, the FMC approved and published proposed interpretive rule on container availability that would clarify application of the port terminal per diem penalties.

In March, SSGA’s board of directors will hold a board meeting in Washington, D.C., and expect to visit the FMC and congressional committee representatives to educate them about issues shippers face due to unfair penalties applied for reasons beyond their control.