Eighty agricultural trade groups are asking the Trump administration to push through a proposed Federal Maritime Commission rule that would provide guidance about how the FMC assesses the fairness of demurrage and detention practices. The rule would help mitigate the “ongoing unconscionable imposition of millions of dollars” of detention penalties being faced by agricultural exporters, whose shipments are being delayed by the COVID-19 pandemic, the groups said in an April 3 letter. The groups -- which include dairy, meat, grain, vegetable and fruit trade associations -- urged White House Economic Council Director Larry Kudlow and U.S. Department of Agriculture Secretary Sonny Perdue “to work with the FMC to expeditiously adopt the Interpretive Rule as published.”

Agricultural exporters and shippers are losing “hundreds of millions of dollars” due to shipping uncertainty and cargo detention penalties caused by the response to the coronavirus pandemic, said Peter Friedmann, executive director of the Agriculture Transportation Coalition. Friedmann was critical of the Federal Maritime Commission, which has yet to finalize a proposed rule issued last year that would provide guidance about how the FMC assesses the fairness of demurrage and detention practices. The rule’s public comment period ended in October.

The Federal Maritime Commission should quickly adopt its proposed interpretive rule for addressing detention and demurrage charges (see 1909130026), trade associations said in a March 16 letter to the FMC. “With ongoing challenges posed by the coronavirus, there is real concern about these fees being assessed when there are equipment issues beyond the control of the shipper or motor carrier,” the groups said. “Thus, these fees appear to be punitive measures by the ocean carriers, not an incentive to expedite container flow.”

A recent Federal Maritime Commission proposed rule would lead to a much fairer enforcement process for alleged violations of the Shipping Act, the National Customs Brokers & Forwarders Association of America said in comments submitted to the agency. The proposal would create a process for notifying a target of an investigation and allowing it to respond, and ensure that FMC commissioners see the target’s statement before deciding how to proceed. “As the members of the Commission would necessarily be involved at the outset, it seems more likely that potential enforcement cases would focus on issues that have a material adverse effect on trade or competition and minimize the initiation of cases that are based on relatively minor or technical infringements of regulations,” the NCBFAA said. The proposal would also make it “less likely that there would be an anecdotal approach to enforcement where only [the Bureau of Enforcement] and a respondent know what the issues in any prosecution actually involved.” But FMC should go beyond its proposal and create penalty and mitigation guidelines for Shipping Act violations, the trade group said.

Several issues related to detention and demurrage remain to be addressed as the Federal Maritime Commission moves forward with its recent proposed rule on detention and demurrage practices, said Richard Roche of Mohawk Global Logistics, at the National Customs Brokers & Forwarders Association of America’s government affairs conference Sept. 23 in Washington. Key among these are notices of availability for cargo and charges for customs holds, he said.

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The Federal Maritime Commission will look at multiple factors, including cargo accessibility and the transparency of involved terminology, when it considers whether detention or demurrage practices are reasonable, the agency said in a notice it posted ahead of publication in the Federal Register. The proposed interpretive rule is meant to help address issues with detention and demurrage charges and follows a multiyear effort on that front (see 1606130005). Comments are due Oct. 17, the FMC said in a news release.

The Federal Maritime Commission will likely publish next week a notice in the Federal Register seeking comment on an interpretive rule that is meant to help address issues with detention and demurrage charges, an FMC spokesman said. The agency announced on Sept. 6 that the FMC adopted recommendations from Commissioner Rebecca Dye, one of which includes publishing "an interpretive rule that clarifies how the Commission will assess the reasonableness of detention and demurrage practices." Interpretive rules differ from other regulations in that they don't require a notice and comment period, though the FMC has chosen to go through one, and aren't considered to have the force of law.

The Federal Maritime Commission will seek comments on a proposal to "prevent ocean carriers and marine terminals from imposing free-time (detention, demurrage, per diem) charges when the container cannot be picked up from, or returned to, the terminal through no fault of the shipper/trucker," the Agriculture Transportation Coalition said in a Sept. 6 email. The FMC didn't comment. The trade group said carriers have made such penalties "a major cost for importers and exporters and their truckers, often threatening to lock out truckers who don't immediately pay, and making shippers' protest/challenges extremely difficult."

The Federal Maritime Commission would like to update the processes for revoking or denying ocean transportation intermediary (OTI) licenses, the agency said in a notice. While the FMC previously updated the processes in 2015, "the revised process, however, has proved to be imprecise in certain respects and has not led to the reduction in time and expense that was anticipated," it said. The agency's proposal would include a new hearing procedure that is "based on the procedure for formal small Shipping Act claims," it said. "The new hearing procedure would be overseen by an administrative law judge and would represent the type of expedient, low-burden process sought in the previous rulemaking while fulfilling the need for more detailed procedural requirements." Comments on the proposal are due Oct. 3.