WASHINGTON, D.C., April 6, 2020 — The National Grain and Feed Association (NGFA) and 79 other associations representing the U.S. food and agriculture supply chain requested urgent engagement from Trump administration officials to ensure the competitive, fluid movement of shipping containers to international markets.
In an April 3 letter to National Economic Council Director Larry Kudlow and Secretary of Agriculture Sonny Perdue, the groups requested their “urgent intervention” to encourage the U.S. Federal Maritime Commission (FMC) to adopt a rule that would address “the ongoing unconscionable imposition of millions of dollars of unfair detention and demurrage penalties on U.S. agriculture by ocean carriers and marine terminal operators during the coronavirus crisis.”
Ocean carriers and terminal operators are imposing detention and demurrage charges when ocean freight containers cannot be returned or picked up within a short “free time” window, even when the delay is caused by the ocean carriers or terminals themselves, the groups explained.
“These fundamentally unfair fees are frequently exorbitant in nature, even exceeding the negotiated freight rates in some cases, and render U.S. agriculture exports less competitive in the global markets,” the letter said.
The FMC investigated the fees over the course of three years and unanimously voted in August 2019 to publish a proposed rule to curtail these abusive detention and demurrage practices. The groups urged Kudlow and Perdue to work with the FMC to expeditiously adopt and finalize the rule.
“The ongoing injury to U.S. agriculture and forestry industries as a result of these unjustified penalties is very real, especially with the challenges posed by the coronavirus,” the groups said. “There is great concern about detention and demurrage fees being assessed when there are equipment issues beyond the control of the shipper or motor carrier as a result of the pandemic.”
NGFA, established in 1896, consists of more than 1,000 grain, feed, processing, exporting and other grain-related companies that operate more than 7,000 facilities and handle more than 70 percent of all U.S. grains and oilseeds. Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators; and associated firms that provide goods and services to the nation’s grain, feed and processing industry. NGFA also consists of 33 affiliated State and Regional Grain and Feed Associations, and NGFA is co-located and has a strategic alliance with North American Export Grain Association, and a strategic alliance with Pet Food Institute.