Earlier this year, the FMC voted unanimously to finalize the interpretive rule addressing detention and demurrage charges in the hopes of improving the situation on the ground and improving the supply chain. Unfortunately, months later, we find ourselves facing significant congestion at our Nation’s largest seaports and allegations that parties in the industry are utilizing detention and demurrage as profit centers rather than the means to incentivize the rapid and constant return of equipment.
I have heard, anecdotally, stories of barriers to the timely return of equipment by shippers, and I have also heard assertions that, due to record levels of movement and full warehouses, some shippers are using the equipment as low-cost storage at a time when the carriers desperately need their equipment back. Indeed, it seems everyone is at fault and no one is to blame. I wholeheartedly support the supplemental order issued yesterday so that Commissioner Dye can assess the situation and provide clarity.
I firmly believe that the interpretive rule on detention and demurrage, if followed correctly by all sides, would address 98% of incidents. This expanded investigation will ensure that all parties are acting in good faith.
As Commissioner Dye continues her good work, I have every faith that she will bring together the appropriate parties to work out a quick solution to the current disfunction at ports which are crucial to our supply chain. We are at record levels of movements at most ports across the Nation, with some ships having to wait 2-3 days at sea to get a berth. Now is the time, more than ever, when we need technology, labor, terminals, truckers, rail, and other stakeholders to come together and ensure fast and efficient movement of all goods. We can not allow the current situation to unduly enrich some and penalize others nor can we allow the current congestion to create an imbalance in the flow of goods. Exports, as well as imports, must be given adequate attention and protection. We cannot focus exclusively upon the import side of the equation. As a nation we must maintain the robust export of American-made goods into the global economy. If we continue to be a nation focused upon the consumption of imports, and neglect to ensure our export market is protected, our economy’s foundation is as doomed as ancient Rome.
Louis E. Sola is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.