FMC crackdown on ocean carrier billing prompts Port of Houston effective tariffs changes

The Port of Houston will stop charging storage fees on import containers that linger too long at its marine terminals when their truck gates are closed; however, the port will impose a 32% higher per diem fee on some containers to prompt shippers to retrieve them when gates are open.  Effective May 1st, Bayport and Barbours Cut Container Terminal will no longer have Saturday gate hours due to low demand. The terminal's hours remain in operation Monday - Friday from 6:00 am - 7:00 pm (ingate closes at 6:00 pm).

The change in Houston’s policy, effective May 1, comes in the wake of a barrage of complaints levied against various container lines through the Federal Maritime Commission (FMC) in recent months, a flurry that has been accelerated by the OSRA-22 shipping reform law that President Joe Biden signed last June. 

Ocean carriers have responded to those complaints by waiving detention and demurrage charges on days when the marine terminals are closed.  Ocean carriers also asked Port Houston for the tariff changes to align with their new policies of not charging per diem fees on days when terminals are closed. Although final rulemaking is not expected until June, port officials at Houston believe that marine terminals will eventually be barred from charging their own demurrage when gates are closed. 

“The ocean carriers have interpreted the FMC’s action to prohibit any detention charges when terminals are closed. Whatever the eventual rule is from the FMC about demurrage, that’s our interpretation of the rulings.” Roger Guenther, Port of Houston Authority executive director, told the Journal of Commerce. 

As for the increase in per diem rates, Guenther said that they are needed to ensure shippers are incentivized to not let cargo congestion slow down port operations, even when truck gates are closed. “We’re a port authority, but we’re also a marine terminal operator, too,” he said. “It’s all based on the FMC’s interpretive rules on demurrage to incentivize cargo flow.” 

The board of commissioners for the Port of Houston Authority on Tuesday approved changes in the tariffs for the Bayport and Barbours Cut marine terminals regarding demurrage for loaded import containers.  Beginning this past Monday, shippers whose import cargo sits at the two terminals past allotted free time will not be charged demurrage on days when “gates are closed for scheduled terminal closures,” according to the advisory. Free time for containers at the terminals will remain seven days once a container is available for pickup.  

However, the demurrage rate for a 40-foot container has increased from $66.36 per day to $87.77/day, while a 20-foot container will now be charged $43.89/day, up from $33.19/day. The new rates will apply to both terminals.  

In addition to those changes, Houston will also increase the sustained import dwell fee and excessive import dwell fee that it would levy during periods when cargo is severely backlogged. A $45-per container fee would be charged on the eighth day following the expiration of the port's allotted free time for imports.  

“The purpose of these proposals is to continue to incentivize the movement of cargo, respond to developments in applicable law and precedent, and adjust related financial measures,” the port said in an advisory about the tariff changes. 

 

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For more information regarding Port of Houston's Effective Tariff rates:

https://porthouston.com/wp-content/uploads/2023/05/Tariff-14.-May-2023.pdf

https://porthouston.com/wp-content/uploads/2023/05/Tariff-15.-May-2023.pdf

 

Source: FMC crackdown on ocean carrier billing prompts Houston per diem change | Journal of Commerce. (2023, May 3). https://www.joc.com/article/fmc-crackdown-ocean-carrier-billing-prompts-houston-diem-change_20230503.html