· Two cases were filed that the Federal Maritime Commission (FMC) would like to use to further aid in defining what ocean carriers are allowed to charge when invoicing demurrage and detention. These cases will serve to help examine the scope of the agency’s May 2020 interruptive rule. The rule is a demand of fairness of billing detention and demurrage fees specifying that fees invoiced should be viewed through a perspective of whether the invoiced fee encourage the pickup and return of import cargo.
· The first case filed is TCW Inc. v. Evergreen. This core of this case is the idea of “once in demurrage always in in demurrage”. TCW has argued they should receive a refund for 3 days of detention fees invoiced by Evergreen during a holiday weekend in May 2020 while the Garden City Terminal was closed. Evergreen’s rebuttal on this argument was simply that prohibiting these fees would disincentivize cargo owners or truckers to return prior to a known port closure such as a holiday or weekend days. In February 2021 an administrative law judge ruled in favor or TCW citing the May 2020 rule. Now the full commission decided shortly after they would like to take a deeper look into the case.
· The second case of Mohawk Global Logistics v. Mediterranean Shipping Co. USA (MSC) focuses on whether a carrier can charge demurrage even when it is responsible for door-to-door delivery under contract. Mohawk further alleges that MSC delivered cargo to others but denied a free time extension on cargo not yet delivered per contract terms prior to an additional 10 days of demurrage fees invoiced. MSCs answer to this is that the demurrage was reasonable because the cargo required electricity to prevent spoilage as it was temperature controlled. They also stated they did have availability to deliver cargo earlier to arrival but after a winter storm closed the port for 2 days the remaining free time had expired. Both parties have until September 24 to inform the FMC if they would like to proceed with mediation on this dispute or to instead go before an administrative law judge.
Thursday September 23, 2021
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