April 7, 2020

WG, Industry Send Letter on Demurrage Charges

WG joined 80 agriculture groups in sending a letter to National Economic Council Director Larry Kudlow and USDA Secretary Sonny Perdue asking them to encourage the U.S. Federal Maritime Commission (FMC) to adopt a rule curtailing unfair detention and demurrage penalties by ocean carriers and terminal operators.

According to the letter, ocean carriers and terminal operators impose detention and demurrage charges when ocean freight containers cannot be returned or picked up within a short “free time” window, even when the delay is caused by the ocean carriers or terminals themselves, such as when the terminal is closed or the ship is late.

The letter states: “These fundamentally unfair fees are frequently exorbitant in nature, even exceeding the negotiated freight rates in some cases, and render US agriculture exports less competitive in the global markets.”

The signatories urge the FMC to adopt a proposed rule that would provide guidance for when a detention or demurrage charge can or cannot be fairly imposed.

Click here to read the full letter.