Ag shippers want more container ‘free time’ during coronavirus outbreak
A group of American agriculture and forest products shippers wants the ocean carriers in the U.S.-China trade to extend the “free-time” deadlines for containers delayed in marine terminals due to the impact of the coronavirus on international shipping.
“While this is open-ended, our U.S. exporters need assurance they will not be charged detention (per diem) or demurrage while the supply chain remains dysfunctional due to the Coronavirus,” wrote Peter Friedmann, executive director of the Washington-based Agriculture Transportation Coalition (AgTC) in a letter to the ocean container carriers on Monday.
Demurrage pertains to the time an import container sits in a container terminal, with carriers responsible for collecting penalties on behalf of the marine terminals. Detention, also known as per diem, relates to shippers holding containers for too long outside the marine terminals.
Typically, shippers face $150 to $350 demurrage and detention fees assessed daily by the ocean container carriers and marine terminals when they are unable to pick up or drop off containers due to operational problems at the terminals outside their control.
Most container carriers have already agreed to suspend detention and demurrage penalties through the extended Chinese Lunar New Year holiday to Feb. 9.
“As long as there continues to be a lack of cargo and documentation handling in the ports due to the virus, our exporters and importers shouldn’t be on the hook for per diem or demurrage charges, and no one know how long this will last,” Friedmann told American Shipper.
“We now seek further guidance with regard to our export cargo landed in China, or imports marshaled for and awaiting export,” Friedmann said to the container carriers. “Unfortunately, the World Health Organization and national health agencies predict the Coronavirus will be a threat well beyond February 9.”
He added the AgTC is willing to “work collaboratively” with the container carriers to “mitigate the impacts of this global health crisis on our business and yours.”
Fairness with detention and demurrage fee assessments has been a central issue for the AgTC the past two years.
On Jan. 23, the coalition developed draft language for AgTC members to use during service contract negotiations which sets parameters for when ocean carriers can justify demurrage and detention charges for late pickup and delivery of containers at marine terminals.
The action follows the U.S. Federal Maritime Commission’s (FMC) recently proposed interpretive rulemaking for when it is appropriate to assess demurrage and detention charges, as well as precipitates the start to the annual service contract negotiations between ocean carriers and shippers.