JUNE TRADE NEWS UPDATE

 

 

 

 

[DETROIT, MI– June 20TH, 2022]

Regulating Demurrage and Detention

As ocean freight spot rates gradually come down, we’ve seen the additional costs associated with ocean containers unfortunately continue to reach extreme levels. Charges like demurrage and detention have become a significant source of additional income for steamship lines. Both of these charges, according to the Federal Maritime Commission, are to be incentive-based charges for importers and exporters to use steamship line equipment as needed and to return this equipment within the provided amount of free time. However, it is becoming more frequent that even when ready, the availability for ports and rails to receive empty equipment for import containers is at times nonexistent and while this is not something that may be caused by an importers’ failure to contribute to freight fluidity many steamship lines aim to collect thousands of extra dollars per container at times when this occurs. The FMC’s recent conclusion of their investigation into excessive charges related to “earliest return” and “empty return” issues indicates that the recent pandemic has been an advantageous period for steamship lines to collect additional funds on import and export containers as a result of congested ports and severe equipment shortages affecting the container drayage industry.

Fortunately, the conclusion of this investigation has led to series of proposed changes and rules to provide more clarity on empty container return and early return date policies to ensure steamship lines and ports operate within the guidelines stated by the FMC. The ongoing push to require an FMC Compliance Officer to be employed within each steamship line, port and terminal will continue as well. The supply chain strains experienced over the past couple of years has brought with it equipment shortages of many varieties and some locations have seen much higher levels of equipment dislocation than others. While not the fault of an importer or exporter, they are the ones who have been left with an exorbitant bill for something entirely out of their control. According to the FMC’s commissioner, an extreme focus on balancing equipment availability at all rail locations around the country will be a priority to aid in reducing the additional costs and hassle importers and exporters have seen with many of their shipments. While it may be a slow process, it is a step in the right direction for regulating the power the steamship lines and ports hold over others in the ocean shipping industry.

 


 

 

 

 

Port of Vancouver ranks among the worst in the world, according to World Bank report: Port efficiency has taken on a new level of urgency amid pandemic supply disruptions

 

Statement by Minister Ng on United States’ request for consultations on Canada’s new dairy tariff rate quota policies under Canada-United States-Mexico Agreement:“Canada and the United States share a long-standing and mutually beneficial economic relationship, and the continued implementation of tangible CUSMA market access commitments will help bring benefits on both sides of the border.”

 

Goods barometer remains flat as Ukraine conflict, COVID-19 weigh on trade: The conflict in Ukraine and recent pandemic-related lockdowns in China appear to be dampening global goods trade in the first half of 2022, according to the latest WTO Goods Trade Barometer.

 

Canada launches new platform for consultations and seeks input on regulatory barriers to trade: Effective regulations protect the health, safety, environment and economic well-being of Canadians. Modernizing our regulatory system improves Canada’s ability to attract investment and growth-oriented businesses.

 

Supply chains are never returning to ‘normal’: Article discusses how the world has changed during the Pandemic and how supply chains will be different moving forward.  It discusses those changes and the options to help navigate those changes.

 

Giant container ships are ruining everything: This article discusses how bigger vessels are to blame for the supply chain issues that we face as well as giving a history of what got us to that point.

 

Worker Shortages Snarl Shipping Even as Shanghai Lockdowns Ease: Short article about worker shortages and the effects it is having on the supply chain

 

Panama Canal Ship Queue Reflects Shipping Bottlenecks: Article about shipping bottlenecks at the Panama Canal.  As more ships try to bypass the west coast, more bottlenecks will occur in Panama

 

FMC’s Dye finds no evidence of collusion among ocean carriers: Federal Maritime Commission still could investigate ‘numerous charges’ in ocean shipping

 

Risky business: How shipping boom, war and COVID impact safety at sea: An in-depth interview with Allianz on evolving safety risks faced by shipping

 

Southern California ports rank dead last on global efficiency index: Ports in Middle East and China dominate top 10


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