The Federal Maritime Commission (FMC) announced it will implement a formal investigation headed by Commissioner Rebecca Dye to focus on the practices of vessel operating common carriers and marine terminal operators related to detention, demurrage, and per diem charges. FMC Fact Finding Investigation No. 28 will evaluate five key issues:

• Whether the alignment of commercial, contractual, and cargo interests enhances or aggravates the ability of cargo to move efficiently through U.S. ports;
• When has the carrier or MTO tendered cargo to the shipper and consignee;
• Billing practices for invoicing demurrage or detention;
• Practices with respect to delays caused by various outside or intervening events;
• Practices for resolution of demurrage and detention disputes between carriers and shippers.

This formal investigation was prompted by Petition P4-16, filed at the Commission by the Coalition for Fair Port Practices in December 2016, and by the large volume of comments received by the Commission in response to this petition. In January 2018, the Commission held two days of hearings on issues raised in this petition by soliciting testimony from shippers, ocean transportation intermediaries, ocean carriers, truckers, and marine terminal operators. A final report of findings and recommendations in this proceeding is due to the Commission no later than December 2, 2018.

Back to top

Acting FMC Chairman Michael Khouri testified recently before a subcommittee of the House Committee on Transportation & Infrastructure where he presented the FMC’s budget for fiscal year 2019 (FYI 2019) and summarized recent consolidation in the container shipping industry and explained how the Commission maintains a careful watch on industry trends, being vigilant for any indications of anticompetitive behavior by carriers. FMC’s requested level of funding for FY 2019 is USD 27,490,000.

In his written testimony before the House subcommittee Acting Chairman Khouri noted due to the increased size and market share of carrier alliances over the last four years, the FMC has insisted on narrower authorities, more specific language, and enhanced monitoring requirements. The Commission monitors and analyzes commercial contracts confidentially filed in the FMC’s SERVCON System between vessel-operating common carriers (VOCCs) and shippers for the transport of U.S. exports and imports. Commission staff conduct focused research and analysis on service contract terms and conditions to investigate or clarify industry reports, gain better insight into emerging industry issues, and to better inform policy decisions.

The Acting Chairman’s testimony also noted the Commission recently finalized a new Strategic Plan for FY 2018-2022 and summarized the Commission’s recent efforts in the areas of regulatory reform, and its Supply Chain Innovation Team Initiative, and the petition of the Coalition for Fair Port Practices, Petition P4-16, which prompted FMC Fact Finding Investigation No. 28. He explained this fact finding investigation will focus on how demurrage and detention practices can optimize, not diminish, the performance of the American international freight delivery system. On the subject of protecting the public from unlawful, unfair and deceptive practices, Acting Chairman Khouri also noted the Commission crossed an important milestone in FY 2017 with the successful launch of its web-based Ocean Transportation Intermediary (OTI) triennial update process for OTI license renewals.

Back to top

Ocean carriers serving the East Asia/USA trade lanes (U.S. Imports) have updated their FMC tariffs to apply inland surcharges. The inland surcharges range from USD 100 to 400 per container. Some ocean carriers will apply the inland charges in addition to Intermodal Door Delivery (IDD) surcharges published in 2014.

The additional surcharges will apply on shipments moving under tariff rates, and existing service contracts for inland or door service that do not provide for exemption from these tariff rules. Some ocean carriers will limit the scope to cargo moving through Chicago IL, Columbus OH, Houston TX, Indianapolis IN, Memphis TN, Savannah GA. The additional intermodal surcharge is in response to increased trucking costs to move cargo to door points in the USA.

Here is a table of carriers that have posted intermodal, inland, trucking, store door surcharge amounts in their FMC tariff rules.

Back to top

Several leading carriers have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective April 15, 2018, including APL, Evergreen, Hapag Lloyd, Hyundai Merchant, Ocean Network Express, and OOCL. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The April 15th GRIs will be the seventh GRI of 2018 for the East Asia/USA trade lane.

Instead of filing an increase in their tariff, Maersk announced a contract increase for effective April 15, 2018 for the Far East Asia/USA trade lane. The contract increase will affect those with service contract (SC) rates that expire April 14, 2018, who want new SC rates valid April 15, 2018 and beyond. The contract increase will be USD 480/600/600/750 per 20ft/40ft/40HC/45HC dry container, respectively. Once SC rates expire on April 14, 2018, tariff rates will apply until a SC written agreement is finalized to reflect the contract increase. Filing of original SCs with FMC is required on or before the effective date; the deadline for filing SC amendments with FMC is within 30 days of scheduled effective date.

The following carriers updated their respective tariffs to include new General Rate Increases (GRIs) effective May 1, 2018, including APL, CMA CGM, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant, and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The May 1st GRIs will be the eighth GRI of 2018 for the East Asia/USA trade lane.

Note 1: COSCO GRIs apply on all cargo moving under service contracts only.

Each carrier maintains its own tariffs and controls its own pricing.

Back to top