SIGNALS™ provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry. For past issues, please consult our index.

Coalition of Trade Groups Petitions FMC to Limit Demurrage and Detention Charges

The Coalition for Fair Port Practices, a group of twenty-six trade associations representing importers, exporters, drayage providers, freight forwarders, customs brokers, and third-party logistics providers have formally petitioned the Federal Maritime Commission (FMC) to request it initiate a rulemaking proceeding for the purpose of adopting a rule that will interpret the Shipping Act and clarify what constitutes “just and reasonable rules and practices” with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible. This 209-page petition, including exhibits, was acknowledged by the FMC and assigned as Petition No. P4-16.

In its petition, The Coalition for Fair Port Practices proposes a rule for adoption by the Commission and requests specific guidance as to the reasonableness of such charges when port conditions prevent the timely pick up of cargo or the return of carrier equipment because of broad circumstances that are beyond the control of shippers, receivers, or drayage providers. The text of the new FMC rule suggested in the petition would have the FMC formally state it will be unreasonable for a common carrier or a marine terminal operator to fail to extend free time or to collect demurrage, detention or per diem fees for a period equal to the duration of the “disability” wherein shippers are prevented from tendering cargo or receiving equipment due to port congestion, port disruption, weather-related events, or delays caused by governmental action or requirements.

Each of the trade associations in the Coalition for Fair Port Practices has provided a “statement of interest” in this petition. Coalition members include the American Apparel & Footwear Association, the American Chemistry Council, the American Import Shippers Association, the Intermodal Motor Carriers Conference of the American Trucking Association, the International Association of Movers, the National Customs Brokers & Forwarders Association of America, Inc., the National Retail Federation, The National Industrial Transportation League, the Transportation Intermediaries Association (TIA), and several other trade associations representing exporters and importers of specific commodities. Verified statements from people employed by Coalition members who have first-hand knowledge to the issues set forth in the petition are provided in its exhibit C.

The FMC has received comments on Petition No. P4-16 from nearly one hundred interested parties, including many in support of its aims, and several that oppose it. In its comments, the American Association of Port Authorities (AAPA) wrote it concurs with the comments filed by the Port of Houston Authority which argue the proposed rule would “deprive terminal operators of compensation, almost always in circumstances over which they have no control,” and that it agrees with comments filed by the National Association of Waterfront Employers which state that the proposed rule is “inconsistent with the Shipping Act's stated purpose of establishing a non-discriminatory regulatory process with a minimum of government intervention and regulatory costs.” The World Shipping Council, a group representing twenty-two leading ocean carriers also commented in opposition, and it respectfully urges the Commission to deny Petition No. P4-16.

The FMC will review all comments on this petition and issue a report in due course. At this time, it is not known whether a rule making proposal or any other action by the FMC will result from Petition No. P4-16.

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Transpacific Eastbound Carriers Adjust Surcharges, File GRIs Effective April 1, 2017

Several carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective April 1 through June 30, 2017. Details are as follows:

TSA EASTBOUND CARRIER SURCHARGE UPDATES (Asia to USA)
BUNKER ADJUSTMENT FACTOR (BAF), Apr – Jun 2017
To US Atlantic/Gulf Coast Ports *
To US Pacific Coast Ports *
To US IPI/MLB via US Pacific Coast */**
USD 559 per 20ft container ( ↑ )
USD 311 per 20ft container ( ↑ )
USD 472 per 20ft container ( ↑ )
USD 621 per 40ft container ( ↑ )
USD 345 per 40ft container ( ↑ )
USD 524 per 40ft container ( ↑ )
LOW SULPHUR FUEL SURCHARGE (LSF), Apr – Jun 2017
To US Atlantic/Gulf Coast Ports
To US Pacific Coast Ports
USD 0 per 20ft container ( – )
USD 19 per 20ft container ( ↓ )
USD 0 per 40ft container ( – )
USD 21 per 40ft container ( ↓ )
INTERMODAL FUEL SURCHARGE (IFS): USD 161 per 20ft ctr; USD 179 per 40ft ctr ( ↑ )
CURRENCY ADJUSTMENT FACTOR (CAF): 4% on shipments from Japan only ( ↓ )

Recommended BAF amounts shown with the asterisk (*) include the low-sulfur fuel component. For IPI/MLB destinations, the BAF includes both low-sulfur fuel component and the Inland Fuel Surcharge (IFS) component (**). BAF for other container sizes is as per formula.

Several TSA members postponed General Rate Increases (GRIs) from effective March 1 to effective March 6, 2017, including American President Lines (APL), CMA CGM, COSCO, Evergreen, Hapag Lloyd, and Hyundai Merchant Marine. COSCO postponed GRIs for dry cargo to March 6, but its GRIs for refrigerated cargo will remain effective March 1. OOCL cancelled these GRIs. NYK is no long a carrier member but also postponed its GRIs until March 6.

Effective April 1, GRIs will be USD 800 per FEU for COSCO, Evergreen, Hyundai, and Yang Ming. COSCO made an exception for refrigerated cargo of USD 1080/1200 per 20’/40’HC, respectively. Also, APL filed GRIs of USD 1000 per FEU, and Hapag Lloyd filed USD 700 per FEU. K Line and NYK are no longer carrier members, but filed similar GRIs of USD 800 per FEU and USD 1000 per FEU, respectively. GRI amounts for all other container sizes are as per formula.

These will be the fourth and fifth GRIs of 2017 for the East Asia/USA trade lane.

The TSA Carrier group only issues recommended guidelines to its member carriers. The group's web site at www.tsacarriers.org provides additional information; however, each carrier maintains its own tariffs and controls its own pricing.

The TSA's 10 member carriers are: American President Lines, CMA CGM, COSCO Container Lines, Evergreen Marine, Hapag-Lloyd AG, Hyundai Merchant Marine, Maersk Line, Mediterranean Shipping, OOCL, and Yang Ming Marine.

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TSA Westbound Carriers Update Surcharges Effective April 1, 2017 and File GRIs

Several members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes (U.S. Exports), have adjusted their fuel surcharges for the April to June 2017 quarter. Details are as follows:

TSA WESTBOUND CARRIER SURCHARGE UPDATES (USA to Asia)
BUNKER ADJUSTMENT FACTOR (BAF), Apr – Jun 2017
From US Atlantic/Gulf Coast Ports * From US Pacific Coast Ports *
Dry Cargo
Reefer Cargo
Dry Cargo
Reefer Cargo
USD 672 per 20ft ctr ( ↑ )
USD 862 per 20ft ctr ( ↑ )
USD 374 per 20ft ctr ( ↑ )
USD 491 per 20ft ctr ( ↑ )
USD 840 per 40ft ctr ( ↑ )
USD 1077 per 40ft ctr ( ↑ )
USD 467 per 40ft ctr ( ↑ )
USD 614 per 40ft ctr ( ↑ )
LOW SULPHUR FUEL SURCHARGE (LSF), Apr – Jun 2017
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
USD 20 per 20ft container ( ↓ )
USD 18 per 20ft container ( ↓ )
USD 25 per 40ft container ( ↓ )
USD 23 per 40ft container ( ↓ )
INTERMODAL FUEL COMPONENT (IFC), Apr - Jun 2017
For Rail, Intermodal Rail/Truck
For Local/Regional Truck
USD 179 per ctr ( ↑ )
USD 52 per ctr ( ↑ )
CURRENCY ADJUSTMENT FACTOR (CAF): 5% to Taiwan ( – ); 15% to Singapore ( ↓ )

Recommended BAF amounts shown with the asterisk (*) include the low-sulfur fuel component. BAF for other container sizes is as per formula.

Some TSA Westbound Carriers also updated their tariffs to provide General Rate Increases (GRIs) effective April 1, 2017 of USD 120/150/150/190 per 20’/40’/40’HC/45’HC, respectively, for US inland origins via IPI/MLB/RIPI, and USD 80/100/100/140 per 20’/40’/40’HC/45’HC, respectively, for all other US origins. GRI amounts for all other container sizes are as per formula.

The TSA Westbound Carrier group only issues recommended guidelines to its member carriers. The group's web site at www.tsa-westbound.org provides additional information; however, each carrier maintains its own tariffs and controls its own pricing. General rate increases are filed only in carrier tariffs.

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