Year: 2020

The U.S. Federal Maritime Commission (FMC) voted on Tuesday to grant the temporary relief from certain service contract and tariff filing requirements requested by French ocean container carrier CMA CGM.

The carrier sought relief from commission regulations earlier this month as part of its efforts to respond to a crippling cyberattack on its computer system in late September.

The commissioners granted the request for exemption from relevant service contract filing requirements and relevant tariff publishing requirements.

Both exemptions are subject to certain conditions, the FMC said. The exemption from tariff publishing requirements applies only to cargo received on or after the date of the order.

“Because the commission’s exemption authority is limited to prospective relief, the commission denies the request for exemption from the relevant tariff publishing requirements for cargo received prior to the date of this order. Instead, the CMA Group may use other procedures provided by the Shipping Act that allow them to refund or waive collection of freight charges for these shipments due to failure to publish a tariff,” the FMC said in its temporary relief order for the carrier.

CMA CGM asked the FMC to use its authority under the Shipping Act to institute the exemption for a period of 60 days, starting on Sept. 27, when it was struck by the ransomware attack.

The carrier said the cyberattack had impacted its ability to publish tariff rates and rules, as well as file service contracts and amendments, which are required under the Shipping Act, in a timely manner.

“Granting this petition will allow the CMA Group to apply service contract rates agreed upon with customers and tariff terms offered to customers for shipments received before filing or publication can be accomplished, rather than requiring customers to pay higher rates due to the CMA Group’s inability to conduct timely service contract filings or tariff publications,” the carrier said in its four-page petition.

CMA CGM cited that subsidiary APL had been unable to publish new rates and prevented from amending existing rules. APL, for example, could not revise its general rate increase effective data from Oct. 1 to Nov. 1 due to its lack of access to its tariff system.

CMA CGM and ANL use a third-party tariff publisher that was not subject to the cyberattack. However, the two operations were unable to access quotes that have been submitted to customers to convert them into tariff line items for current bookings.

“In the absence of relief, customers who book against their quotes will be invoiced at higher NOS rates because the quotes will not be converted to tariff line items prior to cargo receipt,” the carrier said in its petition.

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The World Shipping Council (WSC) has filed an agreement with the U.S. Federal Maritime Commission (FMC) to ensure that its continued container shipping advocacy work complies with the 1984 Shipping Act.

WSC submitted the six-page agreement to the agency on Oct. 1. Without objection from the commission, it will become effective Nov. 15.

Since its formation in 2000, the Washington-based WSC has interfaced with governments and advocated positions in regard to laws, policies, rules and regulations of governments and international organizations affecting ocean container carriers.

“Our work in the past has focused on our interactions with governments and international organizations on policy and regulatory initiatives, and that will remain the case in the future,” he added. “There may be situations in which governments are unable to drive solutions, however, and in those cases, we may want to look at how the industry can work together to tackle these challenges.” 

WSC has also been instrumental in increasing government and public awareness on the importance of container shipping to the global economy.

“As we look to the future, the nature of the challenges that the industry faces will continue to grow and change,” WSC President and CEO John Butler told American Shipper.

The agreement would authorize WSC members to exchange information, discuss and reach “voluntary, nonbinding agreement (including best practices and/or guidelines for voluntary implementation of best practices)” with regards to environmental and climate change matters relating to vessels; legal and regulatory matters involving competition and antitrust laws; positions to be taken in respect of international agreements, treaties and conventions; positions related to requirements of or under consideration by state, national, regional and international governments; safety and security involving packing, labeling, storage and handling of dangerous cargoes; and positions related to matters of information technology, data submission, customs, cybersecurity, and electronic bills of lading.

These types of activities may fall into the category of “cooperative working agreement” under the Shipping Act, thereby potentially triggering a filing requirement, Butler explained.

“We are filing the agreement at this point to make sure that we have access to the appropriate tools to meet the industry’s challenges and out of an abundance of caution to make sure that we are in full compliance with the U.S. Shipping Act. With or without an FMC agreement, the council has and will operate within the boundaries of legal requirements everywhere we are active,” he said.

While not common, the WSC agreement filing with the FMC is not unique. The Cruise Lines International Association, for example, has had a similar agreement on file with the FMC for years.

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U.S. agriculture and forest product exporters are counting the ways and dollars it costs them when ocean carriers without warning change the dates for container arrivals at marine terminals.

The Washington-based Agriculture Transportation Coalition (AgTC) and supply chain technology firm TradeLanes recently reached out to hundreds of American shippers to survey the operational and financial impacts of earliest return date (ERD) fluctuations on their businesses.

The AgTC and TradeLanes have analyzed and processed data collected from 283 survey respondents, which they said quantifies the problem with erratic ERDs from the ocean container carriers.

“Costs and disruption imposed by inaccurate and changing earliest return dates for containers are eroding margins,” said AgTC Executive Director Peter Friedmann in a statement. “Restoring ERD integrity is a top priority for our industry.”

 Some of the highlights from the 25-question survey include:

• More than 75% of respondents said their carrier bookings frequently lack a listed ERD.
• Most respondents reported that a quarter of their containerized shipments experienced ERD changes, with 35% of respondents reporting ERD changes for more than half their shipments.
• Seventy-eight percent of respondents noted that at least 5% of shipments impacted by ERD changes incurred additional costs that reduced their profitability, with 8% noting 50% or more of their containerized cargoes experienced additional ERD-related costs.
• Seven percent reported ERD-related disruption costs of $1,000 or more per shipment.

AgTC has been monitoring this problem among its shipper members in recent years and wants carriers to correct the problem.

Friedmann said the inability of ocean carriers to keep shippers immediately informed about changes to sailing schedules and ERDs for containers leads to demurrage charges, additional truck and storage costs, rolled cargo and missed sailings.

Since ocean carriers have contractual relationships with the shippers, either through service contracts or bills of lading at the individual shipment level, the AgTC said they are obligated to communicate directly and immediately with those customers and not depend on marine terminals and other parties to let the exporters know of ERD changes.

In many cases, once a container enters the intermodal stream, shippers have little to no recourse to stop a container en route to a marine terminal when they discover changes to the ERD. Shippers and their truckers are left struggling to find storage and parking until the containers are allowed into the marine terminals for loading on the ships.

While both AgTC and TradeLanes believe that a technological solution can be developed for ocean carriers to immediately and uniformly communicate ERD changes to shippers, it will require an industrywide push to make that happen.

All parties in the supply chain will need to work together to develop a “fair and effective standard of practice,” Reese Giangola, TradeLanes’ chief of staff, told American Shipper.

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The Washington-based Institute of International Container Lessors (IICL) has appointed Dennis Lombardi to president, effective Jan. 1.

Lombardi will take over from Steven Blust, who will be retiring as president but will stay on at the IICL as a senior adviser.

Prior to this appointment, Lombardi operated his own consulting firm, Lusoco Consulting, and worked with Global Logistics Development Partners as an associate advising on maritime logistics.

He had spent 40 years previously working for the Port Authority of New York and New Jersey, including serving as deputy director of port commerce and running the day-to-day operations for the department and preparing capital investments.

After his retirement from the port authority, Lombardi spent five years as an executive with third-party logistics services firm Romark Logistics.

This extensive experience is what attracted the IICL to hire Lombardi, said IICL Chairman Robert Sappio in a statement Monday. “We are confident he will serve as a strong leader who will guide the organization as the industry continues to evolve,” he added.

Blust has served as IICL president since 2006, after serving a four-year appointment to chairman of the U.S. Federal Maritime Commission. Before that, he served nearly four decades in the ocean container shipping industry.

The IICL said it benefited from Blust’s extensive industry and regulatory experience during his tenure as president. He guided the container leasing industry through complicated issues, such as combating counterfeit refrigerant usage and global financial market disruptions.

“Mr. Blust’s cooperative approach to developing an agile organization supported the membership in minimizing risk and adopting best practices to mitigate operational challenges,” the institute said.

Blust, 72, told American Shipper that he is most pleased with this work on technical matters that involved improving the economics and environmental integrity of the ocean container. This included designing a new floor system to reduce use of hardwoods and applying safer anti-corrosion coatings to the steel exteriors of the boxes.

Blust also pointed to the IICL’s work on container safety issues, such as container stacking and strengthening. In addition, the IICL has incorporated more operational and regulatory matters surrounding container chassis.

The IICL was founded as a trade association representing maritime container and intermodal chassis lessors in 1971. Its member companies include Beacon Intermodal, CAI, Direct ChassisLink, Flexi-Van, SeaCube Container, Textainer, TOUAX, TRAC Intermodal and Triton International.

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Ed Greenberg plans to retire as general counsel for the National Customs Brokers and Forwarders Association of America (NCBFAA) at the end of December after 35 years of representing the ocean freight transportation intermediary industry in Washington.

Greenberg, 78, made the decision four weeks ago after spending the past six months working from his home office and enjoying the presence of his 2-year-old grandson.

“It had never occurred to me. I had no interest in retirement,” Greenberg told American Shipper in an interview. “But I have decided that it’s my time and I want to spend it with my grandson.”

Grounded in transportation law

Greenberg has spent his entire career in transportation law, first with the former Interstate Commerce Commission (ICC) heading up the agency’s Bureau of Enforcement concerning the regulations of truckers and freight forwarders. 

After that, he led the government’s investigation of the cost overruns and rate regulation of the Trans Alaska Pipeline and successfully persuaded the ICC that it had the power and should suspend the excessively high rates of the pipeline. That decision was affirmed in a landmark case by the U.S. Supreme Court.

In 1978, Greenberg joined the firm now known as GKG Law of Washington, where he first worked on railroad rate cases.

In the mid-1980s, he was approached by a dozen non-vessel-operating common carriers (NVOCCs) to represent them in seeking refunds of the costs imposed by the steamship lines as a result of the so-called 50-mile rule. The rule, in essence, precluded NVOCCs from loading and unloading containers within 50 miles of an International Longshoremen’s Association-controlled port to preserve those jobs for longshore labor.

The battle was hard fought at the Federal Maritime Commission (FMC) and in the federal courts, but by the late 1980s the 50-mile rule was finally declared to be unlawful, and Greenberg was able to obtain millions of dollars in reparations for his NVOCC clients. It was also the start of a three-decade relationship with the NVOCC industry.

“I realized then that I was on the ground floor of an industry that was undergoing tremendous change,” he said.

It was also during this time that the NCBFAA’s then-general counsel Gerry Ullman notified Greenberg of his retirement and his interest in having him apply for the role. The association liked Greenberg’s credentials and brought him on board.

Greenberg said at that time the NCBFAA did not have a strong NVOCC presence. Most of its prowess was aimed at customs broker and freight forwarder issues. But the industry was changing dramatically as the intermediaries began taking on a much larger role facilitating the movement of cargo in large part because of the nature of containerization and the need for significantly more logistics services than the carriers could provide.

“I think I was useful in getting various government agencies to appreciate the role of NVOs and the NCBFAA in the international supply chain,” he said.

NVOCCs earn respect

In the early 1990s, there was an underlying hostility toward NVOCCs within several federal agencies in charge of freight transportation regulations. “I think they believed that NVOs were a bunch of guys operating in dark rooms figuring out how to cheat shippers and carriers and not offering any value,” Greenberg said.

Greenberg used his role as the NCBFAA’s general counsel to alter the federal government’s perception of NVOCCs, and through his representation on legislative and regulatory issues on behalf of the association successfully changed agency views of this burgeoning industry.

Greenberg has always preferred to take a measured tone with the FMC’s commissioners and staff, despite seeming indifference at times to how the regulations and policies tended to stifle the growth and efficiencies of intermediaries.

“My relationship with the FMC as a whole was never needlessly adversarial even when we didn’t see eye to eye on all issues, but I did feel that there were offices within the agency that at times could be inappropriately hostile to the NVOs and forwarders,” he said.

Over the past 20 years, Greenberg said he has noticed a substantive change within the FMC to be both more cognizant of the value of intermediaries and more receptive to the NVOCC industry’s concerns.

Since the enactment of the 1998 Ocean Shipping Reform Act, the FMC has considered the role of NVOCCs far more favorably in its regulatory actions. For example, in the early 2000s, the NCBFAA worked with the FMC successfully to press the Chinese government to allow non-Chinese NVOCCs to operate more freely in that market and issue their own bills of lading.

There have also been a number of other deregulatory actions taken by the FMC that have tended to ease unnecessary regulatory burdens on this inherently competitive side of the transportation industry, he said.

Greenberg cited, as a prime example, his work with the FMC to develop the exemptions that allowed the industry to enter into NVOCC rate arrangements (NRAs) and NVOCC service arrangements in a manner more reflective of today’s service contracts between shippers and ocean carriers. And, with additional deregulatory changes, the NRA process now effectively eliminates the need for rate tariffs, a goal that Greenberg had long sought.

In addition to interfacing with the FMC, and again working through the NCBFAA, Greenberg was instrumental during the 1990s and early 2000s in working with the Census Bureau’s Foreign Trade Division and Customs and Border Protection to develop regulations and procedures that permit NVOCCs to become responsible for electronically filing their own shipment data with the agencies without having to share proprietary information with or rely on the various underlying carriers.

He takes pride in the NCBFAA’s recent role in working with both the Coast Guard and FMC to ensure that NVOCCs are exempt from the “verified gross mass” requirement for containerized shipments, which he called “a terribly inefficient, costly and unnecessary requirement for NVOCCs in the U.S.”

Ongoing issues

During the past two years, Greenberg helped the NCBFAA members voice their concerns to the FMC over unfair demurrage and detention charges imposed on them by the ocean carriers.

Demurrage pertains to the time an import container sits in a container terminal, with carriers and terminals assessing significant charges when containers are not moved in or out within the applicable free time. Detention relates to shippers or NVOCCs holding containers outside the marine terminals beyond the established free-time period.

For years, shippers and NVOCCs have complained to the FMC about being forced to pay unfair and costly demurrage and detention fees whenever container equipment cannot be returned or picked up by their truckers during the free period for reasons beyond their control. 

The FMC’s recently issued interpretative rule on these issues will, Greenberg hopes, work to make the process fairer and not penalize NVOCCs or shippers when the delays are not their fault.

Greenberg continues to worry, however, about the competition and supply chain impacts to NVOCCs and shippers if the ocean carrier industry should further contract. “I would hate to see what happened to the rail industry after 1980 happen to the ocean carrier industry,” he said. 

He opined that it was essential for the FMC to use its authority to ensure that the trend toward consolidation through ocean carrier alliances does not stifle competition or that the agency consider seeking legislative authority to control carrier behavior in the absence of real competition in the ocean carrier industry.

While Greenberg will miss his relationship with the NCBFAA and clients, he has no regrets stepping down at this time.

“The staff and members of the association continue to work for the common good and make the industry ever more professional,” he said. “It has been an honor to have been a part of this remarkable organization for so many years. Similarly, I have treasured the opportunity to work closely with other clients and government officials over this time and build wonderful relationships that I will not forget.”

NCBFAA’s changing of the guard

The NCBFAA in recent years has undergone a changing of the guard in terms of management, as younger members increase their roles and responsibilities in the association.

NCBFAA’s Washington lobbyist Jon Kent, 74, retired last September after 35 years of representing the association on Capitol Hill. Before year’s end, the association selected Washington-based government relations and consulting firm Whitmer & Worrall to be its representative on legislative matters.

Greenberg said GKG Law colleagues David Monroe and Katie Meyers will continue to represent the NCBFAA as transportation counsel and general counsel, respectively.

NCBFAA staff and members expressed both appreciation for Greenberg’s decades of work to improve the industry’s position in the supply chain and regret for his soon-to-be departure.

“His retirement is bittersweet,” said NCBFAA President Jan Fields. “While I am thrilled that he will be retiring to spend more time with his grandchild, we will surely miss his strong leadership and expertise as an icon in our industry.”

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E-commerce shipping logistics company ShipStation released a national consumer study detailing consumer buying tendencies and the impact of delivery fulfillment on brand perception. The COVID-19 pandemic has largely been a positive for e-commerce companies, as people turned to buying online when cities shut down to tackle the virus spread. 

The report specifies that North American consumers increased shopping by 33% over the course of this year, with nearly two-thirds mentioning that most of their shopping is done online due to the pandemic. Increasing consumer expectations on shipping experiences continue to put pressure on e-retailers. While consumers expect expedited shipping for their products, they also ask for free or negligible shipping costs. 

ShipStation’s survey respondents make this clear, with 97% saying shipping costs are a primary factor and 92% saying shipping speed also is a primary factor while making an online purchase decision.

Still, expectations on expedited shipping have relented a bit over this year, courtesy of the pandemic. While consumers expected to receive their online purchases within five days in 2019, they were content with receiving them within eight days this year. But this has taken a toll on the shipping costs parameter, with two out of three respondents expecting free shipping due to slower-than-normal shipping speeds. 

“Free shipping is a consumer expectation born before COVID — which is why that particular data set skews so highly; it’s an industry standard at this point,” observed Krish Iyer, the director of strategic partnerships at ShipStation. “When it comes to investing in fast versus free shipping, businesses have typically put their dollars toward offering free shipments with average delivery timelines to keep up with the likes of Amazon and other e-commerce companies that made free shipping a customer expectation versus a nice-to-have.”

But since the pandemic, expectations over on-time deliveries have decreased exponentially. Iyer explained that ShipStation saw a new trend in which consumers were more willing to pay a premium on enhanced delivery experience — anticipating the supply chain bottlenecks over pandemic-induced restrictions. Consumers staying indoors are ordering more online and, with certain items, are willing to pay a premium for on-time arrival. 

“Our advice to retailers this holiday season would be to continue offering free shipping to uphold an industry standard. But with premium delivery, be warned that customer expectations will be high. If you offer premium options, make sure you can deliver on your fulfillment promise or risk losing customers for good,” said Iyer. 

Another interesting observation from the consumer survey was that people had begun their holiday shopping well in advance — as early as August or September in some cases. About 62% of shoppers said they would start their shopping by October, slightly up from the 58% last year. This year’s rise might be attributed to delivery delays around COVID-19, aside from inventory and product availability concerns. 

The impact of such nontraditional holiday shopping schedules can go beyond just the retailer’s sales and hit the entire inventory lifecycle. Consumers are stockpiling goods early on, which would likely increase returns during the prime holiday season rather than in January. Iyer contended that this could lead to retailers running out of inventory before the actual holiday climb, while inventory gets back to stores via returns during prime time. 

“Depending on when certain retailers measure their quarterly sales cycles, early shopping will absolutely impact their bottom-line revenue. However, I think inventory management and how consumer behavior will impact returns cycles is the metric that they should be paying attention to as we inch toward the holidays,” said Iyer. 

***

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Cold storage warehouse owner and operator Americold Realty Trust (NYSE: COLD) announced on Tuesday that it has entered into an agreement to acquire the world’s fourth-largest temperature-controlled operator, Agro Merchants Group, for $1.74 billion.

The announcement follows several others over the last two years as the Atlanta-based real estate investment trust continues to expand its network through acquisition. Americold added facilities in Florida and Texas in August and was chosen by the East Coast’s largest retail grocery group for a $325 million two-facility project in May. In 2019, Americold acquired Canadian-based Nova Cold Logistics in a $250 million deal and purchased Cloverleaf Cold Storage from a private equity group for $1.24 billion.

In addition to being the globe’s No. 4 cold storage provider, Agro is the third largest in Europe and the fourth largest in the United States.

Founded in 2013, Agro has amassed a portfolio of 46 refrigerated facilities through acquisitions aided by the help of investor Oaktree Capital Management. The company’s warehouses include 236 million cubic feet across 10 countries in Europe, North America, South America and Australia. Agro’s global operations are headquartered in the Netherlands, while its U.S. operations are based out of Alpharetta, Georgia.

“We are very excited to welcome the Agro team to the Americold family as we expand the scale and enhance the geographic reach of the Americold network. The acquisition of Agro represents a unique opportunity to acquire an institutional-quality global portfolio that facilitates our strategic entry into Europe and adds complementary locations in the U.S., South America and Australia, where Americold is already established,” said Americold President and CEO Fred Boehler.

The $1.74 billion deal will consist of $554.3 million in Americold stock, $519 million in cash, the repayment of $560 million of Agro debt and the assumption of $110 million of Agro’s capital leases and sale leaseback agreements. Management from Oaktree and Agro will hold 14.2 million shares of Americold stock. The lockup period for those shares ends May 17, 2021.

In a separate announcement, Americold announced a public offering for 29 million common shares with a 15% overallotment for another 4.35 million shares. The total offering represents roughly 16% of the company’s outstanding shares as of the end of the second quarter. Proceeds from the offering will facilitate the 14.2 million private placement of shares with the sellers.

Americold will use the proceeds from the offering for general business purposes and debt repayment and to fund expansion opportunities and acquisitions if the transaction doesn’t close.

Citigroup Global Markets Inc. (NYSE: C), BofA Securities (NYSE: BAC) and Goldman Sachs & Co. LLC (NYSE: GS) are the joint book runners on the offering.

Americold expects the portfolio to provide a 6.3% net operating income (NOI) yield initially, with NOI yield increasing to a stabilized range of 7.3% to 8.3% five years after closing. The deal implies an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) multiple of 22.3x and is expected to be modestly accretive to earnings in 2021.

The acquisition is expected to close late this year or early in the first quarter of 2021.

“I am extremely proud of the work we have done to build Agro into a true industry leader in temperature-controlled logistics with a global portfolio,” said Agro CEO Carlos Rodriguez. “We are confident that by joining Americold we will accelerate our growth and by combining our complementary networks, we will be able to provide a more comprehensive range of solutions to customers around the world.”

Americold expects the transaction to allow it to “serve multinational customers on a global scale” by expanding its footprint into Europe, adding port facilities in Europe and the U.S. and building out its existing presence in Australia and South America.

After the close, Americold’s portfolio will consist of 229 owned and managed facilities and 1.35 billion refrigerated cubic feet.

“We have always admired Americold as leaders in the cold storage sector and we believe that the combination of Agro’s portfolio with Americold’s operating system and global platform creates an extremely compelling growth story,” Oaktree managing director Zach Serebrenik said. “For this reason, we will retain a meaningful equity position and look forward to participating in what we expect to be significant shareholder value creation over the long term.”

Citigroup is Americold’s exclusive financial adviser on the transaction with Moelis & Company LLC acting in the same capacity for Agro.

Shares of COLD are down 2% in early trading.

FreightWaves Cold Chain Summit will be held on Oct. 23.

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French ocean container carrier CMA CGM has “urgently” petitioned the U.S. Federal Maritime Commission (FMC) to temporarily exempt it from meeting certain tariff publication and service contract filing requirements while it continues to clean up its systems from a recent cyberattack.

The carrier asked the FMC to use its authority under the Shipping Act to institute the exemption for a period of 60 days, starting on Sept. 27, when it was struck by the ransomware attack.

CMA CGM said the cyberattack has impacted its ability to publish tariff rates and rules, as well as file service contracts and amendments, which is required under the Shipping Act, in a timely manner.

“Granting this petition will allow the CMA Group to apply service contract rates agreed upon with customers and tariff terms offered to customers for shipments received before filing or publication can be accomplished, rather than requiring customers to pay higher rates due to the CMA Group’s inability to conduct timely service contract filings or tariff publications,” the carrier said in its four-page petition.

CMA CGM cited that subsidiary APL has been unable to publish new rates and prevented from amending existing rules. APL, for example, could not revise its general rate increase effective data from Oct. 1 to Nov. 1 due to its lack of access to its tariff system.

CMA CGM and ANL use a third-party tariff publisher that was not subject to the cyberattack. However, the two operations are unable to access quotes that have been submitted to customers to convert them into tariff line items for current bookings.

“In the absence of relief, customers who book against their quotes will be invoiced at higher NOS rates because the quotes will not be converted to tariff line items prior to cargo receipt,” the carrier warned.

The FMC is considering CMA CGM’s petition and will accept public comments on the request through Thursday. Comments should be sent by email to secretary@fmc.gov.

“The CMA Group is leveraging currently functional systems to track its commitments to customers and minimize any negative impacts on customers from this cyberattack,” the carrier said in its petition. “The flexibility to publish and file those commitments as soon as practicable is crucial to reducing potential burdens on customers.”

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Freight transportation industry and shipper groups say they are preparing detailed responses to the U.S. Federal Maritime Commission (FMC) review of ocean carrier pricing practices.

The FMC, which announced the notice of inquiry on Wednesday, said it is seeking information from the container-shipping public on alleged attempts by ocean carriers to hold companies financially responsible for transportation services that they did not contract for and may not legally be required to pay.

The FMC said it received comments for its earlier Docket No. 19-05, Interpretative Rule on Detention and Demurrage under the Shipping Act, which raised concerns about these billing practices. The agency finalized the interpretative rule in April.

Specifically, the industry allegations point to ocean carriers defining “merchant” in their bills of lading to include persons or entities with no beneficial interest in the cargo and have not consented to be bound by the terms in the bill of lading, the agency said.

Entities being tied to merchant obligations in ocean carrier bills of lading may include non-vessel-operating common carriers, freight forwarders and truckers.

Separately, the FMC’s Bureau of Enforcement will seek specific billing information from certain ocean carriers serving U.S. international container trades.

“It’s encouraging that the FMC is taking its responsibility seriously when it comes to detention and demurrage charges,” said Peter Friedmann, executive director of the Washington-based Agriculture Transportation Coalition and an outspoken critic of how these charges are accessed by the ocean carriers against U.S. exporters.

The New York-New Jersey Foreign Freight Forwarders and Brokers Association has pointed out through the FMC’s interpretative rule on detention and demurrage practices that ocean carriers define the term ‘‘merchant’’ in their bill of lading too broadly, resulting in parties being billed for demurrage and detention ‘‘regardless of whether they are truly in control of the cargo when the charges were incurred.’’

Demurrage pertains to the time an import container sits at a container terminal, with carriers responsible for collecting penalties on behalf of the marine terminals. Detention relates to shippers holding containers for too long outside the marine terminals.

For years, shippers have complained to the FMC about the unfair imposition of these fees whenever container equipment cannot be returned or picked up during the free period for reasons out of their control.

The Washington-based World Shipping Council, which represents 95% of the global container industry by volume, told American Shipper that it is reviewing the inquiry and will share its views through the FMC’s comment process.

Comments related to the inquiry must be submitted to the FMC by no later than Nov. 6.

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The autonomous vehicle (AV) niche is gaining momentum, with incumbent automakers and high-profile startups pushing pilot vehicles on public roads and testing their technology to improve self-driving capabilities. In the commercial context, the trucking mid-mile segment might become one of the early adopters of this technology as trucks can encounter less traffic when hauling freight across interstates and highways. 

While this would mean that fleets in the mid-mile segment could considerably reduce their operational costs, it also could lead to the exodus of truck drivers. 

“Though the technology will have to be perfected, if a truck can run without a human operator, then it theoretically could operate 24 hours a day, with the only downtime being for fuel. There would be no hours-of-service requirements and it’s also a lot safer,” said Justin King, senior vice president of product and innovation of North America trucking for Comdata. “There would be tremendous cost savings potentially, making this technology huge for the trucking industry.”

When autonomous technology becomes commercially viable, it would also impact fleet insurance rates as driverless vehicles are expected to be a lot safer on the road than human-driven vehicles. An Accenture report states that auto insurance premiums could fall by nearly $25 billion by 2035 — equivalent to 12.5% of the total market. 

Though AVs will spin off a dedicated insurance segment, estimates show that the annual insurance revenue loss due to AVs will exceed the new segment’s gain. 

While discussing the impact of self-driving vehicles, it is also crucial to look at the negation of the human element of trucking and the economic and regulatory challenges that can build up against such technology. For governments, regulating autonomous driving technology is tricky. While it promises safer roads and a drastic reduction in logistics costs, it could displace millions of truck drivers, a conundrum with which authorities struggle. 

“Though there would be regulatory headwinds to AVs, I think this would go down in phases. Right now we’re in the testing phase, where there are clearly several models of autonomous trucks made by several companies that are being test-driven on roads. But they come with operators who are in the cab to take over when the vehicle does not do something right or is stuck in a situation,” said King. 

Still, an AV learns in every mile it courses through — be it real life or simulation. King believes AVs will be able to drive on their own without intervention by the next decade. 

For Comdata, the disruption caused by AVs from a fueling perspective is of interest. “The question is how do we enable the fuel transaction when the vehicle is driverless? Today, trucks pull up at the gas station and get fueled by someone, and there also is a physical plastic card swipe. But with AVs, we need to think about contactless and location-based payment,” said King. 

Technology around contactless payment has been flourishing as well. Last year, German banking major Commerzbank announced a collaborative effort with Daimler Trucks on developing a blockchain-based payment solution that automates machine-to-machine (M2M) transactions. If proven successful, this technology can bridge the gap of manual fueling and fuel cards, allowing machines to interact seamlessly without hassle. 

“We think the future is disruptive to what we see in the industry today. It’s not just the carriers and fuel card companies that are facing change. For instance, how are the truck stops going to adapt to AVs? We would not need as many truck stops in an autonomous driving world, which can completely change amenities and service models,” said King. 

As technology disrupts practices, the industry must follow its cue and adapt to change. King contended that the industry stakeholders are brushing off the inevitable, not looking to change processes until disruption is upon them. 

“Everything is happening so fast, and the future is going to be electric and autonomous. It is time the industry thinks of its future a lot more aggressively than it is at the moment,” he said. 

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