- Federal Maritime Commission Chairman Daniel B. Maffei and Commissioner Rebecca Dye voiced support Tuesday during congressional testimony for auditing ocean carriers on their compliance with the agency's detention and demurrage rule.
- Maffei said he would like to audit each of the nine major ocean carriers — even if the agency has not received a complaint about the company — to get information about their demurrage and billing practices. Dye said detention and demurrage audits should happen on a regular basis.
- The process of auditing the ocean carriers would be resource-intensive, Dye said. "I don't know if we have the resources for that," Maffei said, after voicing support for the auditing process.
The Tuesday hearing in the House Subcommittee on Coast Guard and Maritime Transportation came in the context of an already stressed supply chain. High demand for ocean freight has strained networks, clogged ports, made containers tough to come by and resulted in shippers levying criticism on carriers.
"I'm told by many shippers that the detention and demurrage rule is very good, but we also find that the carriers continue to issue the same detention and demurrage charges, which the rule declares to be unreasonable," Rep. Peter DeFazio, D- Ore., said during the hearing.
Alexis Jacobson, the international accounts manager for Bossco Trading, referred to the current detention and demurrage environment as "unfair" in her opening statement at the hearing, adding that it is hard for the business to challenge the fees. The burden of proof in detention and demurrage cases is typically on the shipper or trucker, which makes it unlikely the parties are able to successfully challenge the fees.
A recent survey by the Harbor Trucking Association and TradeLanes found that the average charge per container for detention and demurrage fees is $200 or more for 80% of respondents.
"Ocean carriers should not be profiting from these challenges with huge detention and demurrage charges that the FMC has already said are unreasonable," Jacobson said.
The FMC issued final guidelines for detention and demurrage last year. Dye spoke earlier this year about becoming increasingly concerned with how carriers are complying with the FMC's detention and demurrage rule, noting that the agency is considering steps around enforcement.
In written testimony to Congress, World Shipping Council CEO John Butler said U.S. regulators already have the authority to enforce the detention and demurrage rule and pointed out that the FMC has not received any formal complaints on the issue.
Shippers are concerned that if they file a complaint, carriers might retaliate against them, which is why there's a lack of formal complaints, Dye told lawmakers at Tuesday's hearing.
"Our exporters are concerned about retaliation," she said. "I can assure you and members of the subcommittee and all of my export colleagues, that that is a violation of the Shipping Act currently, and we would take strong and decisive action if we heard about any carrier actually retaliating against any exporter ... for coming to the FMC."
But lawmakers might be interested in updating the Shipping Act. Maffei has said he would like to be involved in the process for "whether or not we should do new legislation" around the Shipping Act. And Maffei and Dye have met with congressional leadership to discuss actions by carriers that "may violate the Shipping Act."
Rep. Robert Gibbs, R-Ohio, said in the hearing that his colleagues are drafting a bill, but didn't say what would be in the legislation, only saying he found a mandate to carry cargo concerning.