Despite recent steps by the White House and the Federal Maritime Commission to address supply chain issues hampering agricultural exporters, the problems are worsening, trade groups said this week. Carriers are increasingly declining or canceling export bookings, ship delays are backlogging orders by months and agricultural exporters are seeing steep drops in revenue due to continually rising container costs, 76 trade associations said.
Pakistan recently amended its Foreign Exchange Manual to simplify its cross-border commercial payment process, which has implications for logistics-related payments, the Hong Kong Trade Development Council reported Aug. 26. The changes include new “arrangements” for paying container detention charges, port demurrage charges and charter costs to the owner of a ship or aircraft, the report said.
More than 80 agricultural trade groups are endorsing a bipartisan House bill they say would address unreasonable detention and demurrage practices and ocean carriers’ refusal to carry U.S. exports in favor of imports. The Ocean Shipping Reform Act of 2021, introduced Aug. 10 by Reps. John Garamendi, D-Calif., and Dusty Johnson, R-S.D., aims to support the “growth” of exporters by holding carriers accountable for their unfair fees and declined export bookings, according to a fact sheet from the Agriculture Transportation Coalition.
The Federal Maritime Commission is investigating the surcharge practices of eight ocean carriers after receiving industry complaints that the carriers have “improperly” imposed fees, the commission said Aug. 4. The carriers -- CMA CGM, Hapag-Lloyd, HMM, Matson, MSC, OOCL, SM Line and Zim -- have until Aug. 13 to respond to questions by the FMC’s Bureau of Enforcement and to “provide details that confirm any surcharges were instituted properly and in accordance with legal and regulatory obligations.”
The Kenya Ports Authority again renewed the free storage period for containers at its ports to help the shipping industry as it recovers from the COVID-19 pandemic (see 2105060007), the Hong Kong Trade Development Council reported Aug. 4. The new deadline is Oct. 20. Port users are entitled to up to 15 days of free storage for domestic export containers at most ports, up from the previous nine-day limit. The number of free storage days for import containers varies by port and type of container. Traders and exporters will be required to pay $30 to $90 per container, depending on the size, for goods stored beyond the free period. Traders will also face a $25 demurrage fee per day.
The Federal Maritime Commission this week issued a series of long-awaited recommendations to address issues in the international freight delivery system that have been exacerbated over the past year due to the COVID-19 pandemic. The recommendations, which resulted from Commissioner Rebecca Dye’s fact-finding mission that began in March 2020, aim to minimize barriers to Shipping Act enforcement and better allow the FMC to “facilitate prompt and fair dispute resolution,” Dye said July 28.
The Federal Maritime Commission will audit ocean carriers’ compliance with the FMC’s rule on detention and demurrage (see 2009140045 and 2011170041) in a bid to stop carriers from imposing unreasonable fees. The newly established Vessel-Operating Common Carrier Audit Program, which includes a dedicated audit team, will conduct the audits, the FMC said July 20. The program will “analyze” the top nine carriers by market share for compliance with the FMC’s rule and “clarify any questions or ambiguities.”
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President Joe Biden signed an executive order July 9 that calls for the Federal Maritime Commission to "consider further rulemaking to improve detention and demurrage practices and enforcement of related Shipping Act prohibitions." The FMC should also "vigorously enforce the prohibition of unjust and unreasonable practices in the context of detention and demurrage" and request recommendations on the subject from the National Shipper Advisory Committee. The EO also suggests that the U.S. Department of Agriculture "consider initiating a rulemaking to define the conditions under which the labeling of meat products can bear voluntary statements indicating that the product is of United States origin, such as 'Product of USA.'” The EO addresses a wide range of issues meant to improve and promote competition in the U.S. economy, the White House said in a fact sheet.
President Joe Biden plans to issue a wide-ranging executive order this week that will address anti-competitive practices, including those affecting traders in the ocean and rail shipping industries, The Wall Street Journal reported July 8. Although White House Press Secretary Jen Psaki said the order will address broad wage and labor issues, it will also call on the Federal Maritime Commission to help traders overcome challenges that have impeded the flow of goods for months, the report said.