As the International Longshoreman’s Association (ILA) strike commenced yesterday morning, our team received word from a source with knowledge of operations at the Port of New York and New Jersey (NYNJ) that, one by one, NYNJ terminals decided to “freeze the clock” on detention and demurrage (D&D) charges for the duration of the ILA strike. To the extent that these reports are accurate and that NYNJ exerts influence within the seaport community, other ports could follow, especially as ocean carriers lobby key decisionmakers on D&D charges.
While a pause in D&D fees potentially would be a welcome development for shippers, there is no guarantee that the benefits would flow through to importers and exporters. Terminals often charge ocean carriers directly, and those charges are then usually passed through to shippers; however, ocean carriers may also charge importers/exporters D&D in amounts greater than what they are being charged by terminals.
Since the enactment of the Ocean Shipping Reform Act of 2022 (OSRA), D&D charges received added scrutiny as OSRA shifted some of the burden onto carriers for justifying D&D fees and provided shippers with better options to contest these charges. Carriers will surely consider this new standard for D&D in the context of the ILA strike; however, the intersection of OSRA with a dockworker strike is a novel circumstance, and it remains to be seen how certain key provisions of the Act will be construed by the Federal Maritime Commission. Our team will continue to follow key developments that will impact the supply chain and logistics community during the strike.
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