Calls for Port Congestion Regulation Ignore Complexity, Risks, Says WSC's Butler
Any Federal Maritime Commission or other regulatory action meant to prevent port congestion issues would likely be either ineffective or too broad and distortive to the marketplace, said World Shipping Council CEO John Butler while speaking at the National Customs Brokers & Forwarders Association of America Government Affairs Conference on Sept. 28. The WSC has previously pushed back against complaints about free time limits and assessing detention and demurrage following an FMC report on port congestion (see 1505080022). The agency's report (see 1504140014), outlined several paths of action, including the opportunity for filing of formal complaints.
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So far, no formal complaints have been filed with the FMC related to demurrage, said FMC Commissioner Michael Khouri. The lack of formal complaints, as well as the number of informal complaints resolved by the agency's Consumer Affairs and Dispute Resolution Services office, shows there's little need for regulatory action, said Butler. While early requests for regulation after the problems at the West Coast ports are "understandable," the problems are fundamentally commercial and operational, he said. Such operation problems can't be fixed through regulation, he said. The decisions of which party eventually bears the various costs are commercial issues that should be figured in market place, he said. With so many issues at play, "it's virtually impossible" to take account for all the possible situations, he said.
Others on the panel disagreed that regulation is too risky. It seems clear that some action is needed, whether through the FMC or in Congress, to help reduce congestion and related labor issues, said Jon Gold, vice president of Supply Chain and Customs for the National Retail Federation. On demurrage, Gold said the FMC already has the authority and should take action to reflect changes to the industry. The Commerce Department's Supply Chain Competitiveness Advisory Committee presents another potential regulatory path forward through its recommendations, he said. The NRF was among the industry groups that said in April that the FMC's report shows that it should go ahead with a regulatory proceeding.