WASHINGTON — The National Grain and Feed Association joined 79 other organizations in a letter seeking urgent relief for exporters from detention and demurrage penalties directly related to the COVID-19 pandemic and urging passage of a proposed rule clarifying when such charges may be fairly assessed.
The April 3 letter pushes White House officials to engage with the US Federal Maritime Commission to expeditiously adopt the Proposed Interpretive Rule to provide detention and demurrage penalty guidance. That rule was published in August following a three-year investigation period led by FMC Commissioner Rebecca Dye. A two-month public comment period drew 104 responses, a majority backing the rule and about half support it as written, according to the letter.
The intent of the letter is quick relief of “the ongoing unconscionable imposition of millions of dollars of unfair detention and demurrage penalties on US agriculture by ocean carriers” and terminal operators during the public health crisis surrounding the novel coronavirus named COVID-19. The letter said the pandemic has led to delays beyond the control of shippers and motor carriers and calls for action to ensure competitive, fluid movement of shipping containers to international markets.
Specifically, the letter’s signatories suggest carriers and terminals are imposing these penalties on US agriculture operations when freight containers cannot be collected or returned during “free time” windows even in cases where the carrier or terminal are responsible for the delay. As examples, the letter pointed to late ship arrivals or closed terminals.
The letter, addressed to National Economic Council Director Larry Kudlow and Secretary of Agriculture Sonny Perdue, cites an FMC study that found the charges to be punitive rather than a good-faith incentive to increase the flow of containers.
Such charges “impose unreasonable costs and significant burdens on the US shipping public, including agriculture and forest products exporters and truckers,” the letter said. “These fundamentally unfair fees are frequently exorbitant in nature, even exceeding the negotiated freight rates in some cases, and render US agriculture exports less competitive in the global markets.”
The NGFA was joined by 79 agriculture organizations standing behind the letter representing sectors such as dairy, egg, grain, oilseed, meat, poultry, produce, pulse, feed, seed and beverage. Signatories included the American Feed Industry Association, the American Soybean Association, the Corn Refiners Association, the International Dairy Foods Association, the Meat Import Council of America, the National Association of Wheat Growers, the National Corn Growers Association and the US Meat Export Federation
Membership in the 124-year-old NGFA is composed of more than 1,000 grain, feed, processing, exporting and other grain-related companies that together manage and operate more than 7,000 facilities and handle more than 70% of all US grains and oilseeds.