Source: The Loadstar
Date: 28th July 2023
America’s Federal Maritime Commission (FMC) unveiled plans for a major shake-up in the collection and return of containers in a bid to alleviate future bottlenecks.
Following a decade of fact-finding missions, aided by industry groups and the FMC’s supply chain innovations team, the commissioner published proposals that would affect Los Angeles and New York ports, calling for shipping community feedback by 15 September.
“We must prepare now to handle the next surge in cargo demand by eliminating bottlenecks and processes that undermine US international ocean freight efficiency,” the commissioner said.
“Based on the commissioner’s experience with innovation teams, she is convinced in focusing engagement among industry leaders, rather than regulatory solutions, is a better way to develop commercial practices that address critical supply chain bottlenecks and improve performance.”
In essence, the proposals aim to generate greater clarity and sharing of information from marine terminal operators (MTOs) and shipping lines with supply chain partners.
Ocean carriers and MTOs would be required to provide shippers with an electronic notice that a container is available for pickup; with free time not starting until the box is accessible and available, the free-time clock stopping for impediments to this.
The proposals say “present container return, early return date and pickup practices create bottlenecks, contributing to congestion and unreasonable demurrage and detention charges.”
Post-pandemic volume spikes led to a build-up of empty boxes at US gateways, with carriers requiring shippers and truckers to pay daily charges for empties, despite port congestion making the return of containers on specific dates virtually impossible in some cases.
The US government introduced the Ocean Shipping Reform Act 2022 in an effort to deal with these perceived injustices imposed by the MTOs and carriers.
Even so, the US remains outside what has been a recent global downturn in D&D charges according to Container xChange, which found just 11 of 65 international gateways surveyed still charging D&D tariffs above 2020 levels – seven in the US.
FMC chair has said he wants to change the “practice” of using D&D as a “revenue centre, as opposed to the intended incentive to pick up cargo and return equipment”.