Ocean carriers and marine terminal operators at major US ports are being ordered to explain how they calculate detention and demurrage charges, amid growing concerns that a spike in costs and delays is hitting apparel and footwear retailers, brands and importers.
The Federal Maritime Commission (FMC) is issuing information demand orders to determine if legal obligations related to detention and demurrage practices are being met.
Go deeper with GlobalData
Targets of the orders will be ocean carriers operating in an alliance and calling at the ports of Los Angeles/Long Beach and New York/New Jersey – as well as marine terminal operators at those ports. They will be required to provide information on their policies and practices related to container returns and container availability for exporters.
The move comes amid concerns over soaring costs and logistics delays impacting the apparel industry.
Companies are having to pay unexpected and unplanned surcharges, premiums, and/or spot rates to get their cargo on ships, according to the American Apparel & Footwear Association (AAFA).
Even then, cargoes have still been rolled, forcing them to miss key delivery dates, leading to further lost sales (particularly for seasonal product) or further charges from their customers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“Further, our members have faced a spike in detention and demurrage charges for situations completely out of their control,” the group says.
Problems cited include a 3 week delay at sea on seasonal goods, contracts being ignored and space not being allocated, delays getting empty containers back to China to keep up with demand, and equipment shortages in China.
The carriers are also using bigger vessels and adding special loaders to satisfy demand, but this is causing issues at the port with congestion, overloaded terminals, and vessels out at anchor waiting for berth space.
Larger ships with more containers, and more ships, means truckers can’t get appointments to pick up the goods – leading to excessive wait times and demurrage charges for delays to unloading. Covid also means there are fewer truckers available.
Earlier this month just-style looked in detail at how Logistics bottlenecks pose major problems for clothing supply chains.
