The Federal Maritime Commission (FMC) warned ocean carriers not to capitalize on the diversions of cargo away from the Port of Baltimore after the collapse of the Francis Scott Key Bridge.
In a Friday statement, the commission said demurrage and detention fees administered by carriers and port terminals must be “reasonable.” These charges both serve as late fees, with demurrage fees assessed on a shipper that takes longer than the time allowed to load or unload a cargo container at the port. Detention fees, on the other hand, occur when a shipper takes too long to return the empty container back to the port.
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“Regulated entities are reminded that all statutes administered by the Federal Maritime Commission remain in effect,” the statement read. “Common carriers and marine terminal operators (MTOs) must continue to comply with all statutory and regulatory requirements governing their operations.”
These fees are designed to incentivize the quick movement of cargo, but have been a point of contention for shippers, their carriers and the port terminals where the cargo is stored since the height of the Covid-19 pandemic.
At the time, in which port congestion became more of a global concern amid surging cargo volumes, many shippers had criticized the carriers and terminals for taking advantage of the conditions at the gateways to charge excess fees.
Bed Bath & Beyond is one shipper that had filed suit against multiple carriers for charging excessive detention and demurrage fees, taking complaints to Mediterranean Shipping Company (MSC), Evergreen, Orient Overseas Container Line Limited (OOCL) and Yang Ming over the charges. And earlier this month, Samsung filed complaints against Cosco Shipping and OOCL on similar grounds.
For Bed Bath & Beyond, the fees are just one of multiple allegations levied against the liners, with the bankrupt home goods retailer also coming at the carriers for failing to meet minimum service requirements and coercing them into paying more for peak season surcharges.
Lawmakers in Washington had kept an eye on the relationships between shippers and carriers, leading to the expansion of the FMC’s power. Two years ago, President Joe Biden signed the Ocean Shipping Reform Act of 2022 (OSRA) into law, enabling the FMC to oversee and enforce these kinds of charges, while also shifting the burden of proof for the reasonableness of fees to ocean carriers instead of shippers.