November ’22 at-a-glance … supply chain

Demurrage and detention billing improvements underway

The Federal Maritime Commission (FMC) proposed a new rule that seeks to bring more clarity, structure, and punctuality to the demurrage and detention billing practices of vessel operating common carriers (VOCCs), non-vessel-operating common carriers (NVOCCs) and marine terminal operators (MTOs). The Notice of Proposed Rulemaking (NPRM) responds to a requirement of the Ocean Shipping Reform Act of 2022 (OSRA) that NAFEM supported earlier this year.

If this proposed rule is adopted, VOCCs, NVOCCs, and MTOs will be required to issue bills for demurrage or detention only to parties with which they have a contractual relationship, to be clear regarding the nature of the charges, issue invoices within 30 days after the charges stop accruing and provide 30 days to dispute the charges with clear information about how charges should be disputed. Comments are due Dec. 13.

Tensions rise at ports

Longshore workers walked off the job for one day at the Port of Oakland, California earlier this month. This “unofficial” action occurred despite an agreement between the International Longshore & Warehouse Union (ILWU) that represents 15,600 dockworkers and the Pacific Maritime Association (PMA) that represents employers at 29 ports to no work stoppages during the now five months of contract negotiations. The PMA and ILWU continue their agreement to avoid public discussion of negotiations. According to supply chain experts, it takes the U.S. supply chain five days to recover from a one-day work stoppage.

Separately, the International Longshoremen’s Association Local 1410 agreed to federal mediation with the Port of Mobile, Alabama to avoid a potential strike. Mobile is the 13th largest port in the U.S.

Status quo extended to avoid national rail strike

Ratification of a proposed contract for the nation’s freight railroad workers remains uncertain. Two of the 12 impacted labor unions voted against and seven ratified the proposal that includes a 24% wage increase through 2024 and lump-sum bonuses for workers. Three unions have votes pending. The unions have agreed to extend the status quo until December 8. The main point of contention is union members’ request for additional paid sick time.

“This agreement to extend the cooling off period affords all unionized employees the opportunity to vote on their agreements free of a looming strike threat,” said American Association of Railroads President and CEO Ian Jefferies. “Our goal remains the same ― successfully completing this round of bargaining ― and to reach an agreement based upon the Presidential Emergency Board’s recommendations.”