Commissioner Dye’s Remarks to the National Retail Federation’s
Strategic Supply Chain Council and Trade Advisory Committee,
In her address to the National Retail Federation’s joint meeting of its supply chain council and trade advisory committee, Commissioner Dye discussed the recently completed first phase of FMC Fact Finding Investigation No. 28, and briefly described the work ahead. In doing so, she referenced the investigation’s Interim Report that would shortly be posted on the agency’s website.
Commissioner Dye began by recounting how her earlier work leading the FMC’s Supply Chain Innovation Teams project had paved the way for the fact finding investigation into demurrage and detention practices.
The supply chain teams had focused on improving the visibility of critical information at marine terminals – which many shippers still viewed as something of a black box. “If you look at U.S. shippers’ information needs,” Dye noted, “you will see that notification of when the container is available for pickup is the heart of the matter. And it is virtually identical to the key issue in our review of demurrage and detention practices.”
Data collected by the FMC during phase one, Dye noted, shows that demurrage, detention and free time issues are not limited mainly to the 2014-2015 period when weather events and West Coast port labor issues led to serious congestion problems; are not limited to a few large ports in Southern California and New York/New Jersey; and are not merely a matter of scattered instances of mainly anecdotal interest without systemic significance.
A review of that carrier and terminal data and information allowed the Commission to identify specific areas that could offer potential benefits to the U.S. freight delivery system as a whole. Including:
- Transparent, standardized language for demurrage, detention and free time practices;
- Clarity, simplification and accessibility regarding (a) billing practices and (b) dispute resolution processes;
- Guidance regarding types of evidence relevant to resolving disputes; and
- Clarity concerning the obligation to give shippers “reasonable notice” of container availability and to provide a “reasonable opportunity” to take delivery of the cargo.
“I believe that transparent and clear terminology, billing practices, and dispute resolution processes can benefit all parties,” Dye said. “The most obvious benefits being a reduction in administrative costs all around – and the often attendant frustrations and ill will.”
Meaningful change on demurrage and detention practices, Dye asserted, would require industry leaders to step forward and address the existing challenges. “And,” she added, “I’ve already begun hearing from quite a few carrier and terminal leaders who say they want to participate – who want to make the system better.”
“Most important,” the Commissioner concluded, “is that implementing reasonable notice of cargo availability and a reasonable opportunity to take delivery of cargo should help move freight rapidly off the terminals, and get containers back into active circulation.”