The Alliance for Chemical Distribution (ACD) recently sent a letter to the Federal Maritime Commission (FMC) to raise concerns about additional surcharges and detention and demurrage charges that terminal and ocean carriers intend to levy on shippers if the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) fail to ratify a labor contract agreement before a September 30 deadline. 

In the letter, ACD President and CEO Eric R. Byer expressed concern over the additional charges shippers are likely to face from terminals and ocean carriers in the event of a labor strike. Byer is concerned that if work-related closures do occur, shippers may face detention and demurrage surcharges despite having no control over the movement of their goods or receive additional services that would warrant a surcharge.

“If there is a work disruption and containers are unable to be delivered to their destination, there is no service being provided to the shipper, thus making any surcharge invalid. Regardless, carriers have already announced surcharges as high as $3,000 per 40-foot container, citing work disruptions as the reason – this is unreasonable.”

Byer continued by underscoring how further detention and demurrage fees are illogical and would slow the recovery of port operations. 

“Also, any detention or demurrage charge would be unreasonable as shippers would not have access to terminals. It will effectively be impossible for shippers to retrieve or return any containers to/from affected ports. This contradicts the need for charges to establish their reasonableness, as required in the Shipping Act of 1984 and reaffirmed by Congress in the Ocean Shipping Reform Act of 2022.”

Byer concluded, “To prevent these unreasonable charges from taking place, ACD urges the FMC to formally issue a statement ahead of the potential October 1 strike; the FMC should reaffirm its previous decisions regarding the question of the necessary reasonableness of detention and demurrage charges, the incentive principle, and the need for surcharges to provide a reasonable service – all of which would be violated by any charges accrued during a strike.”

To read the full letter, click here. For more information about the ACD, visit www.acd-chem.com.