Tag Archives: detention and demurrage

Rail storage fee disputes – STB or FMC?

When containers go by rail to or from ports, we would expect that any detention or storage fees would fall under the Surface Transportation Board (STB) which governs rail traffic in the US. And these fees have become more common, as railroads in the US struggle with manpower shortages, longer trains, lower traffic, and efforts to operate in a leaner fashion. But who to send the bill to?

Many containers are owned by ocean shipping firms, and it would seem like they should be billed if their containers are not picked up in a timely fashion. But it’s the shippers who get the bill.

The Federal Maritime Commission (FMC) has come down with some fairly explicit rules about detention and demurrage charges. The rules specify who is billed, what information must be provided and when, and how disagreements over bills can be resolved, through a process. But when the charges are from rail detention, the FMC claims they have no jurisdiction.

Shippers think the ocean carriers should be billed, and bill disputes be handled at the FMC under the new rules. But ocean carriers think the STB should handle rail demurrage.

I don’t think this can be settled without some Congressional input. It’s one of the gray areas that come up often in logistics, where many partners collaborate to move cargo or cause delays. The parties are never going to agree. For ocean carriers the divided authority is just fine; since they are not getting the rail bills, they have no stake in disputes.

We just need to get a single point of oversight, to lay down rules, like those of the FMC, for demurrage and detention charges including the rail lines. It’s a big ‘just’.

John Gallagher·Friday, May 05, 2023

Ocean carriers: Keep rail storage fee disputes at STB – FreightWaves

Shippers and carriers caught up in new D&D legal battles

There’s no end to the confusion surrounding Detention and Demurrage (D&D) charges for ocean container movements landside. This recital of some recent lawsuits shows that firms are not passing on information that would allow actual determination of accurate D&D charges.

Tthe FMC is starting to crack down on billing that isn’t complete, but some firms may not comply right away, and of course there are older cases which did not come under the recent rule.

The recourse is the courts, and that’s what’s happening now. The supply chain ‘partners’ in the move are handing off responsibility one to another. The Hapag-Lloyd story, involving a forwarder ME Dey, their haulier New Age Logistics, CSX Rail, and Hapag, is just such a case. One claim being made is that the haulier asked to use their chassis to haul the containers to avoid the D&D charges; but they were told that they could not do that, because the containers “belonged to the steamship line”. This kind of nonsensical behavior is not cooperation, and does not facilitate good supply chain relations. Expect more lawsuits!

By Nick Savvides 25/04/2023

Shippers and carriers caught up in new D&D legal battles – The Loadstar

FMC ruling could be crucial in other ‘unfair D&D fee’ complaints

Shipper complaints about demurrage and detention (D&D) charges by carriers have been many, especially over the Coronavirus period, when many facilities were congested and supply lines were overloaded. One of the main complaints was the uncooperative attitude of port terminals and yards when asked to release cargo.

The Federal Maritime Commission (FMC) held a hearing over one case involving Evergreen, a major container carrier, and trucker TCW Inc, in December. Evergreen was forbidden to make per diem charges on days when the motor carrier could not pick up the cargo.

The essence of the FMC argument is that you can’t charge D&D when it’s impossible to pick up the container. Frequently ports and yards may have reasons to deny a trucker from picking up, but if it doesn’t lead to congestion and is the yard or terminal problem, the carrier can’t charge D&D.

The latest case involves carrier Hapag-Lloyd and rail line CSX, versus a Wisconsin forwarder, ME Dey, and the trucker New Age Logistics. Hapag-Lloyd has already waived over $150,000 in charges, and the case is still ongoing. CSX rail may well cave in also.

The principle established by the FMC is important, and may prevent some D&D charging errors in freight bills. Carriers are going to need to be careful and monitor conditions at the facilities holding the containers.

This may go some way toward increasing communication among logistics ‘partners’. Now a carrier must keep informed about the conditions at the yard where the container is located. They will need to ask for information on a continuous basis, which they have a right to, because it is affecting their billing process. If the yard is closed for a holiday, or has the container under a big stack that cannot be moved fast, they will need to tell the carrier, so that the billing can be waived. This information exchange is a crucial part of the financial wing of the supply chain.

When there’s money involved, action often follows.

I think it’s great for the FMC to proactively insist on attention to the possibility of congestion. It will encourage yards to reduce it, and carriers to monitor it, and shippers to work to avoid it.

By Nick Savvides 03/01/2023

FMC ruling could be crucial in other ‘unfair D&D fee’ complaints – The Loadstar