News / Fiata urges carriers to lower D&D charges as lobbying begins at TPM23

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With all eyes on the shipping industry at the TPM conference at LA/Long Beach this week, associations are taking the opportunity to lobby.

Today, Fiata urged shipping lines to review detention and demurrage (D&D) charges, and reinstate free times to “feasible, pre-pandemic levels”.

The forwarder association said it was “the obligation of shipping lines to provide a reasonable free period to allow the merchant sufficient time” for picking up, loading, unloading and delivery.

Fiata agreed D&D charges were useful to ensure the efficient use of container stock – but said some free time was necessary, and helped yards avoid congestion.

It said: “During the last few years, free time periods for containers have been reduced and tariffs for demurrage and detention have increased considerably. Shipping lines justified shorter free periods by noting they increase fluidity and help ease congestion. The decision forced merchants to make considerable efforts to meet free time windows, leading to landside congestion and, above all, traffic jams around major ports and terminals.

“However, merchants have been charged detention and demurrage fees even in situations where they had no control over the container turnaround time, despite their best efforts, due to congestion at ports.”

With demand now lower, and congestion having eased off, there were more containers in circulation, Fiata argued, enabling more free time to be given. This would also help stakeholders with compliance over properly packed and safe containers. It also urged lines to review the equipment and make sure it was fit for purpose.

“Fiata calls for detention and demurrage practices to be in line with the velocity principle, with multi-stakeholder coordination to respond to market needs in a timely manner to strengthen supply chain resilience. Now is the time to act to optimise container movements and improve container quality for future use.”

Fiata was not the only group making its voice heard today. Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTrans), today testified to the Committee on Agriculture, US House of Representatives, urging better efficiencies in the US supply chain.

“There is virtually nothing in agriculture and forest products grown or produced in this country that cannot be sourced or substituted with products from elsewhere in the world. If we cannot deliver affordably and dependably, both our foreign and US customers can – and have proved they will – shift their purchases to those other countries, sometimes permanently. This has in fact occurred periodically for pork, beef, cotton, almonds, soybeans, fresh fruit, etc,” he said.

He called on the US government to ensure “adequate supply of transport services” with federal and state policies and laws. Some of those, he said facilitated the flow of commerce, “or, in a number of states, [they] hinder it”.

Acknowledging the benefits of OSRA, and various interventions by the government in the past two years, Mr Friedmann said more could be done. He wanted clarification on regulatory jurisdiction, for example.

“When a shipper is treated unreasonably by the railroad or the ocean carrier for such an international shipment, does OSRA apply subject to the Federal Maritime Commission regulation, or does the Surface Transportation Board apply its own regulations? This uncertainty is currently preventing exporters and importers from gaining intervention and resolution of significant impediments to efficient freight movement in those inland locations.”

He also called for new or enlarged marine terminals at west coast ports, new deepwater ports, expanded rail depots in particular on the Gulf and west coasts.

“The west coast remains painfully and inexcusably lacking in inland rail load points to serve the overwhelmed west coast seaports. They are desperately needed. It will require Class I railroads, short-line railroads, state and local governments, port authorities and shippers to get these planned and built. Road access is always needed. We hope the funding in the infrastructure bills will provide necessary expansion.”

Noting the complexity in the supply chain, in particular in cool chain products, he said delays could occur at any of the numerous points, creating a crisis that extended to all shipments.