Tag Archives: FMC

Intermodal truckers secure win against ocean carriers

The chassis world is always coming up with a new twist.

Two large chassis pool operators, in Chicago, LA/Long Beach, Memphis, and Savannah, have to allow truckers to use a provider of their own choosing.

The formation of chassis pools about 10 years ago was sparked by ocean carriers’ desire to stop providing chassis. The reason given was that US rules on who is responsible for damages if there is an accident placed the burden on the chassis owner. To escape, the ocean carriers decided to leave the chassis business in the US. That’s typical worldwide; for instance, in Europe most chassis are owned by trucking firms.

But how do ocean carrier customers in the US get chassis to move the containers once they are off the boat? A game theory analysis (Hartman, Bruce and Christopher B. Clott, 2014) showed that truckers would not buy chassis unless they were virtually certain (over 90%) that the shipper would use their chassis rather than deal with the ocean carrier for one. Cargo gotta move — so the ocean carriers needed to find a way.

The answer was ‘chassis pools’. Ocean Carrier Equipment Management Association (OCEMA) developed Consolidated Chassis Management(CCM) to form and manage pools of container chassis at various ports to insure that chassis would be available for cargoes.

Clearly the pools were an advance. Pooling always allows demand to be satisfied with smaller inventory; it’s essentially a newsvendor situation. One big issue, however, is maintenance. A trucker expects to be given a chassis that is in good repair, and will probably not need maintenance during the trip. In the US, the trucker is responsible for on-the-road maintenance. So the question arises— how diligent will pool operators be in maintaining chassis that are turning over quickly?

That question alone was the spark of a putative strike at the LA/Long Beach pool. The union wanted to have control over workers at the pool yard, who were doing the maintenance. It became a big deal in the union negotiations. And the union won– union workers were hired to staff the yards. This went some distance to resolve the problem since the quality of the workforce was controlled by the union and not the owners of the yard.

All this sounds good so far. But issues can arise when individual carriage contracts are made. To what extent can carriers specify what equipment is used, and where it must be delivered when empty? What rates will be set for the use? And can contracts be altered while the chassis is moving, to specify return at a different place, or somewhere well off the route of the trucker?

In this case, the Administrative Judge ruled that motor carriers cannot be forced to use pool chassis; they may use their own chassis source. It’s a victory for truckers. There’s a tricky question of ‘default chassis provider’ when the contract does not specify the chassis source, but it’s clear now that the Judge wants truckers to be free to use their own provider.

That’s a win because it puts truckers in control of their chassis source, and frees them from potential hassles over contracting and repairs they might get into with CCM. They can manage their chassis choice themselves.

It’s interesting that over 9000 pages of documents were filed in this proceeding. Clearly both sides felt there was something to argue.

John Gallagher·Monday, February 06, 2023

Intermodal truckers secure win against ocean carriers – FreightWaves

FMC Summary Decision Text


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

DCSA digital standards poised to become globally accepted

The Digital Container Shipping Association (DCSA) has made some strides in becoming the main source of digital standards for shipping. Digital standards are very important for supply chain management because they guarantee that information is interchangeable between partners in any chain. I think the DCSA has gotten furthest in acceptance of everyone trying to do this.

One view has it that for the maritime industry, ports are the natural players to insure that there is an information hub with standard data for its stakeholders. This data would include not only maritime-related data such as arrival times, departure times, unloading times, locations of containers in the yard, but data relating to transport out of the yard, as well as data related to customs and clearing and safety. In cases where the port has inland depots, the information set should include what’s relevant for customers, and the partners who use those depots to move their cargo, whether it is transload or pickup and delivery.

But what standard data should be captured? Allowing ports themselves to design the data structures themselves is going to open the door to myriad incompatible sets of data. The DCSA has the right idea in trying for a standard that everyone can use.

The European Shippers Council is on board with the DCSA standards, which can be found on the dcsa website. Also, DCSA and the US Federal Maritime Commission (FMC) have been cooperating on the Maritime Data Initiative (MTDI) project.

It’s an important and interesting project for anyone interested in digitizing supply chains. If it works, major advantages will come about for writing software to make supply chains work better.

Maia Kemp-Welch 16/09/2022

DCSA digital standards poised to become globally accepted – The Loadstar