Detention & Demurrage Hearing January 16 & 17, 2018 Drayage and Ocean Carrier Panel

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Good morning day two of hearings on our petition for rulemaking as submitted by the coalition coalition for fair port practices Need any more opening statements in this Commission Maffei you have anything you want start to kick off. No. I just thought yesterday was very very good and productive I look forward to another productive day, and I’m glad everybody got here despite the quote unquote weather The So we have a short panel today, and then to start off with and then we get into carriers and marine terminal operators so Madam Secretary you want to lead us forward. Thank you. Good morning mr. Chairman commissioners just a few housekeeping points before we begin You’ll notice on the screen we have the Wi-Fi Network and passcode if you’d like to sign into that you’ll need to enter the Wi-Fi network name manually and select security level of wpa2 Hope you’re able to see that on the screen Next each witness for those of you new here today will have five minutes on the clock the clock will turn red when you’ve exceeded the five And also when not speaking please be sure to turn off your microphones Our first panel today mr. Chairman we have Tom Adamski Very good morning good morning again Thank you for giving me the opportunity to Sit before you and present. What we hopefully can Share with you as to what we participate in every day even more uniquely than probably everyone knows With the advent of the big vessels I don’t think it’s any big secret that changed the dynamics from When Malcolm McLean started off with the first twenty eight footers and then cut to the big thirty fives and all the other good stuff That’s attached to it I don’t need to elaborate on that and I think the other thing that has caused a dramatic change Also is in 2008 when? many of our steamship line friends elected not to be in the chassis business anymore, thus creating even more of a complete change as to What how where and why we’re doing things, and how we go about doing it, and I think just for oral argument Purposes it comes out to you know basically very very simple things It comes out to what a cost to do will move vis-a- vis what it did cost do a move and all the other good stuff and I think what we’ll end up having to Sit down and understand, and I think it has to be put into some perspective Where we are using Door moves which I’m sure everybody’s familiar is where the steamship line bundles up everything and takes care of the taxicab to get the driver out of the line and all that good stuff. I’m being facetious to say the least but the point being I think it’s an imperative that Those that are participating in the door moves specifically the trucking companies that have to participate with the Clients that have this tariff filed With with you people that they be included the truck of record that is decided by the B CO and/or the steamship line whoever as An addendum and an attachment to access the information that’s on That in that tariff because singularly if a truckman is designated to be if you were the truckman of record he in fact has no access to that and don’t really doesn’t understand quite in fact what the rules are and What I’m saying about the rules it all comes down to arithmetic it comes out the dollars and cents with the chassis supply the free time that’s involved the demurrage is whether in fact they fall in to extended it to demurrage times and or extended to free times with the chassis This presents a problem when there is a problem. If everything is silky smooth. Everything is whipped cream is the best sandwich sandwhich that you ever had, but when it gets into ugliness. That’s when it gets into being a problem, and I think without question there is no reason for The be BCO and the steamship line not to provide the truckman of record that was designated by the BCO and or the shipper and the steamship line I should say access to that information that he is going to be involved in I’ll give you some reasonable examples of it most times when the Steamship Lines are involved they in fact will provide a Chassis and as we know when they exited the chassis business It’s sort of they’re exiting and not exiting and it’s it’s it’s they’re somewhere in the middle of this that’s a big issue because quite frankly when They have the chassis that they’ve provided to and it has been in Trade journals some good submissions by The folks that were directly involved as to what the transactions were that took place these transactions involved Purchases but not purchases that there were direct dispersements these were taking and credit procedures for X amount of time with X amount dollars Allotted so just for argument saying let’s say you have a deal where you use in Chassis and you’re saying you can only use those chassis from one specific IEP, and that’s IEPA IEPA Has a deal with the steamship line that provides just for argument’s say five dollars a day for the chassis however the chassis providers the IEP says geez We’ve got to provide 50 chassis for this particular move for this BCO We don’t have them necessarily in Order for the truckman to take them they’re in inventory But they’re not in roadable order and the truckman determines that there are no chassis available you have to use another chassis Now just for argument’s sake if I was in the IEP and me being greedy Why would I want to allow $5 a day when I can get? $25 a day, or if you would twenty four ninety five that drives me nuts. This is not Walmart where we’re getting chassis from I mean 25 bucks a day and give you the chassis for five, but I’m saying that that doesn’t happen and They don’t do that but logic tells me that maybe that possibility exists You then get the truckman to go in at six o’clock in the morning where no one’s usually up and you say there are no roadable chassis To pick up so I have to get someone else because no one wants to pay for truck ordered not used The box is going into demurrage that day And there’s no reason for it not to be because they have records that will be generated by nine o’clock that morning that suggests there were and In fact there weren’t so then you pick up the load the lock drop it and all the other good stuff That’s attached to it You get to see why where the big bcos use? Multiple trucking companies to drop and pick the truckman may have the chassis for a whole hour or two drops it it becomes the possession of the BCO at the facility with an agreement With the steamship line for the amount of free time there may be five truck men that in fact are taking chassis of trucks containers to that facility Now you have to pick up an empty because that’s your agreement Drop the load and pick up an empty you pick up an empty It’s got a chassis on there in a box you go terminate it That’s the part of your responsibility however the provider of the chassis if it wasn’t the chassis that in fact was Submitted as a chassis to be used on that particular movement doesn’t recognize that so they want to bill you at $25 a day on and on and on for whatever the period of time the BCO ends up keeping the box out there for 30 Days for argument’s sake and has that agreement if you would with the steamship line all of a sudden you handle the chassis for one move One hour and you’re getting a bill from our best friends for roughly six or seven hundred dollars I’d even have you don’t even have to be a Polish guy like me to sit there and understand that’s poor poor economics It doesn’t work and you get into debates on this it in fact Requires that they who are the players in fact have access to that that’s a big issue now With the big ships and all the good stuff I’m talking about New York, but I’ve gotten phone calls because quite frankly with what I do I hear from people up and down the coast we’re not unique in New York with the big vessels coming in there’s a question as to Adherence to some schedule on ETA and all this other good stuff on arrivals It seems to me and I’ve been watching this kind of closely because I do get involved in this Pretty much intimately on a day to day basis just for argument’s sake ships are scheduled with an ETA for February first The arrivals may be February 5th the arrivals may be February 10th They’ll have those kind of variables, but then the bunching comes up now you have Five trucks to do the work that was coming in supposedly on February 1st, but now on February 5th You’ve got three other ships because another one was not early. They’re very seldom if ever early was maybe coming in from the week before And you’ve got a bunching issue where you don’t have Say 25 boxes to move you’ve got 75 def got up come off in four three days. That’s becoming a problem I think what? has to be put in place, and I don’t know how in it does but somewhere aligns got to be talked about that has to be adherence to ETA so that in fact The people who are doing the warehousing have a grasp as to what this is and all this other good stuff So how do you do all this stuff and I know you’re having public hearings I’m glad that you’re doing it, and I think it’s important that you do do that, but I think what are the most important things Everybody adheres just rules That’s why we have red lights green lights and yellow lights however. Everybody knows what that’s supposed to be but if there are no cops People will abuse it and If they know there are none around they may abuse it even more point being somewhere along the line. We have to have the laws Or rules. I shouldn’t say most rules that are in place we’re a Conglomerate of folks that are involved in the industry sit down and participate and advise You folks who are the cops you’re the you’re the guys that call the shots excuse me mr. Chairman. We’re at ten minutes I just want you to know What do I’ve got two more minutes Okay all right somewhere along the line we have to have where in fact when you hit the hammer down There’s adherence to it, but there are rules that are specific one other thing. I want to just bring out New Jersey Motor Truck has been around 103 or 104 years, and they suggest that I was there at the opening I wasn’t it was a few years after but anyway. Be that as it may I’ve been here since day one when they still had bogies and Moore-McCormick lines and American Isthmus being long and all this good stuff point that I’m trying to bring out We had participation especially in the Port of New York with a lot of American flags right now There are no American flags other than the one guy that has a truck outside of PNC T That says Phillies sell it sells Philly cheesesteaks. We have no terminal operators that have US interest other than they have foreign ownership We have all the Steamship Lines that have foreign ownership now with all due Respect and there are friends they come from every continent. We respect them with all due respect for everything however What comes and becomes prevalent without question is the pictures of the dead American presidents that make many many decisions? when we in fact have problems at Port of New York most densely populated state in the Union and at exit fourteen fourteen eight fourteen Thirteen a you have probably the biggest transportation Between the hours of 5:00 in the morning and nine at 9:00 in the morning and then again three in the afternoon till 6:00 condensation of Everybody you could possibly think of that comes there to participate. We are open in those particular times. There is no one that’s either in Switzerland or in Tokyo or anywhere that much cares that there’s a problem in exit 14 a that was compounded because we didn’t have Adherence to rules that are in place that everyone has to adhere to big issue Other issue one more, and then I’m going to let you throw wherever grenade you want at me, but anyway one other issue we have Without question a UIIA, which is the Uniform Intermodal interchange agreement that in fact Regulates for all intents and purposes rules that steamship lines should be playing with for some reason or other When a truckman is designated by the BCO and the steamship line to be the truckman of record on the door move By extension even though the IEPS don’t belong to the UIIA he’s Designating what what’s chassis should be provided that falls underneath the jurisdiction of the UIIA and that I’ve gone into debate on a lot of people say well there should be exclusions there are none that are sitting there So what I’m saying is people are sort of making up their own rules when they want to we’ve got another word that is used constantly with chassis is being supplied and dropped in wrong places. It’s a word called migration I remember the swallows of Capistrano. That’s the migration I knew those are repositioning charges nobody’s bashful about charging the truckman when you do something where it is But when the trunkman now and I’m sure you heard this yesterday because I was talking about belief about What is happening when you got to pick up one chassis for one box another chassis for another one then you get a regular? Merchant haulage move where you can use your own chassis and afford is a customer of Reasonable number that all has to be put into some perspective and ruled second that Everyone is in agreement with with every asterisk that you can think of that. Thank you sir whereas have to okay I’m ready whatever you may have to You certainly covered a lot awful, lot of territories The Material presented before the hearing Said that you were going to discuss An issue of that in truth you only have 32 hours with which to get a container off of an off of a Terminal facility could you within a reasonable period of time discuss that That particular issue solely Specifically everyone knows that you have the four days free time and all that good stuff in it’s either 32 or 40 hours depending what term Will you go it’ll might be 40? 44 hours at 48 hours, but for the most part, it’s right around the 32 to 40 hours Free time in order to pick up a box now let me just give you an example. It’s just plain arithmetic Let’s say you. Have a ship that comes in it has 10,000 containers this point. Let’s say the first day Just for argument sake again let’s go on the assumption that the terminal that it came into can provide you with discharge of three rather a Truck movement of 3,000 containers per day so that’s twelve thousand ten thousand should be whipped cream however The paperwork and all the other good stuff tents Involved they only pick up a thousand the first day the second day they come in and they picked up 1500 so we have 2500 so now we have seventy-five hundred left in Discharge rather to deliver in two days and the maximum that the facility can do is three thousand an hour So three thousand a day, I should say that makes six thousand so you have 1500 in limbo So what do we do with them? Just say okay? You couldn’t get your paperwork in the order and your ETA is just because they’ve been somewhat convoluted and all the other good stuff that I attach to that before you’re in deep doo-doo You’re going to end up having to pay because there’s only so much that we can accommodate somewhere along the line there has to be an equation some quantum mathematics that can evolve and come out with what the Anticipated discharge is as far as volume is concerned. What the characteristic of the terminal some terminals are bigger some are smaller so that in fact that can be shared with How in fact you come up with the conclusion of the four free days, maybe hell you can do it seriously I shouldn’t say maybe you should say that in two free days, but I’m Being facetious in that regard too you have to come up with finite rules that accommodate these magnificent ease Magnificent vessels that they bring in but they also bring in a host of reregulatory practices that have to be put in place That’s where Thank you, and I did do want to comment that Bill Shea with direct chassis link was supposed to be on this panel as well today so that there would be the balance over on The chassis side and unfortunately he had a personal situation where he couldn’t be here I’m gonna Turn to my right and see Commissioner Dye questions that you may have thank you, thank you for your testimony And I do you support the petition that’s before us today, did you have a chance to review it and What we’re doing here today I think you should do it probably once every six months, but somewhere where it’s warmer and not snowing we drove from Jersey, but I Don’t agree. That was a dance, but I think you need without question the input of Representatives of all the participating players that are involved here I mean totally and you need to sit there and say okay This is a real world now for us to suggest for what it’s worth that this will straighten itself out It’s going through too much of a convolution every Convolution right now with the different sized vessels all of a sudden we heard that a couple of the big players are saying we’re not Going to build any bigger ones. We’re gonna sort of watch. What’s going on, then. I’m hearing some other stories that Because we don’t have the ability with the cranes to go over if they pulled in on the port side Sovereign all that other good stuff turn your ship around go somewhere else There’s all sorts of tap dances going on in that regard I think Every one of us have to be cognizant of what’s going on so that we can make the appropriate adjustments to if you would facilitate The jobs and the customer needs for everyone this industry supplies loads of guys. We’re about New Jersey motor truck We have between four and five hundred members But there are 50,000 people that sit there and depend on whether they can get a meatball sandwich tonight because of this industry It’s important, and I’m not saying the meatballs are important I’ll leave it at that But the point being is there are a lot of people that depend on us making if you would Prudent decisions from the input that comes from all the players You guys are the Chiefs call the shots and make it work. Thank you, okay? Commissioner Maffei so we went from pepperoni yesterday to meatballs today, so We’re setting ourselves up well for eventually lunch um And so Mr. Adamski Thank you very much for coming down today and it’s not an easy drive and You certainly convince everybody in this room who’s not in the trucking business that they should be glad. They’re not in the trucking business, so Appreciate that I’m gonna ask something a little bit off-topic, but something I’m very interested in and particularly with New York and New Jersey How much of the issues you face are really due to the fact that? That there’s just a lack of a sufficient infrastructure for these big ships, yeah And I say that fully in the knowledge over the port that you operate in has done tremendous things in a very short time I’ve been up there they build truck ramps over highways Everything from that to raising the Bayonne Bridge I mean But as it still is a lot of this still a lack of sufficient infrastructure to really get the containers out in in that sort of a whipped-cream manner that you’ve been talking about We just talked about the 32 to 48 hour window for that four day period now in fact our competitors friends The rail gives you access to Intermodal cargo if you would that was discharging a different port at a facility other than those that are renting but inside the terminal 24/7 now I’ve heard and I’ve listened to and I sympathize with what has been said well who the hell is gonna pay for it They’re right. My feelings are that we shouldn’t extend hours on the tail end We should extend hours at the beginning when there’s less traffic and less impact on the traffic That’s there in other words the beginning shifts I’ve brought this out at numerous times But in fact just put some things in perspective the industry is change The volumes are coming in condensed and the terminal operators are probably pulling their hair out to get this thing off effectively delivered in a you know in an efficient manner, and I think if you can’t sit down and put together what I said before with the volume of discharge and then take a look at what in fact you’re offering and not look at some sort of method of Extended hours, and you take a look at it Here’s Dunkin Donuts for all intents and purposes open 168 hours a week Now why in god’s name would they open up 40 hours a week if you wouldn’t still have to pay the rent Have to pay the insurance Have to pay the guy to clean the place and all the other good stuff right now With the one shift that you have in place that pays for the rent the Electricity your storage the taxes the overhead of the people that are there because some people you have to pay with security and maintenance and whatever else 24/7 so if you were to increase the volume of time that you’re making cargo Available allow the for three days and made them actually four days not 32 hours or 48 hours or whatever that? Equation comes out to if you were able to do that and say okay, my direct expense for that it’s actually the salaries that I have to pay the people that are going to have to mend and Probably a good portion of them already paid for with the first shift that has at this point in time embraced it all you know and if that equation of course you’re all you’re doing is adding labor the machines are there you’re not gonna buy a whole bunch of new machines because when They’re parked after the first shift They’re taking up space for parking space for all intents and purposes if you utilize and maximize That asset making the availability to the cargo the trucks don’t work if you would 7:00 to 5:00 8:00 to 5:00 and 9:00 to 5:00 They work. Pretty much 24 to seven all the other good stuff one of the other things that has popped are ELDs. I don’t have a real problem with the ELDs It’s a safety factor without question But the eld is documented without question where the GPS Where the truck is how long it is the whole bit and an example just for argument saying if you were going from? Lovely Port Newark Port Elizabeth or Bayonne or Staten Island whatever the case may be and just fry you and say you’re going out to Harrisburg its 186 miles And you were dropping a container and picking it up for all intents and purposes on the predicate that the truck is adhering to all Rules as far as 55 miles an hour. He’s there in less than four hours drops and picks comes back He’s honoring his 11:00 hour requirement with the eld if he could get in and out and all its other good stuff But you can’t because there is an understanding if you’re gonna. Do you know the one terminal has 3000 capacity for the trucks? That’s you know if you’re gonna do the eight hours with the 10 hours whatever you want to do That’s 300 an hour you got to understand that there’s gonna be a line so penny Okay So so just it’s not so much the physical Infrastructures that we’re not utilizing it enough hours in in there right and a 24 hour day. Okay? Thank you. Thank you Thank you mr.. Chairman Thank you I As I’ve heard these comments Yesterday and today. I do want to just make the observation if I may I was reading a a case that the Commission ruled on unanimously on the issue of Congestion, and they were talking about all the new larger ships coming in and Inadequate dock inadequate trucking etc and as I was reading that I couldn’t help but smile Because it was the Commission speaking in 1948 And now know my point is this has been a Universal issue, and it seems like we do continually find efficiencies and whatnot that work through these issues And so We do appreciate you coming in it’s a it’s an issue that we’re Going to continue to struggle with again. Sorry that we couldn’t have a the chassis perspective today Do you have any other Thank you so much appreciate it and We can stay on schedule now for for our Next panel to move on thank you Mr. Adamski, thank you for your time Mr.. Chairman do want to move ahead now or eleven uh scheduled Yes, I’d say can we can we move ahead here? We just need a few minutes Yeah, yeah everyone is here. Are they not for our next panel yes, please Do you want to you want to do ten minutes for a quick we’ll do ten minutes no go ahead It’s perfect excuse me okay, You We can reconvene our second panel Madam Secretary if you would introduce our Our guests. I will thank you that today’s second panel is led by mr.. Richard Craig be followed by mr. Paolo Magnani Mr. Howard Finkel and Mr., John Butler Okay Thank You commissioners appreciate the opportunity to speak at this hearing and Hopefully to dispel maybe a couple of misconceptions that that I heard yesterday I do want to be clear that I’m here on behalf of MOL America. I do not represent the new Japanese Merged company ocean network Express, that’s slated to commence operations in April first I Believe it should be well understood by now I think it’s been clear that the demurrage and detention charges for the purpose of facilitating is efficient a supply chain is possible Demurrage is primarily intended to expedite the movement of cargo through the marine terminals I’m gonna probably be better addressed at the at the next group But these facilities are not intended to be used as storage facilities space is limited and the terminals represent some of the most expensive non-residential waterfront land in the world Primary collective its primary collective interest for all of us to ensure that the marine terminals remain as fluid as possible This in turn means the containers must flow properly through the facilities Nevertheless Mike my organization MOL America does record met does recognize that there’s extenuating circumstances which can prevent the movement of containers in and out of the terminals at such times does attempt to proactively avoid imposing unfair charges And we have a well documented process for dealing with any disputes that remain after the fact I was frankly a little disappointed yesterday to hear the results of a survey that didn’t paint us in a very good light But not knowing the methodology of that survey the questions The nature of the relationship of the parties that might have been surveyed, and how we might compare with other parties I really really can’t address any specifics there. I will say that I meet with Ongoing have been meeting over the last several years with a large cross-section of our customers Large and small customers bcos and NV o–‘s and I guess say this issue doesn’t really come up when we’re talking about concerns and problems that our customers Face so I think that to the best of my knowledge The process that we have in place works reasonably well has been for the last several years We did take corrective action with the problems that occurred Earlier on and I think we work things out for the most part mutual satisfaction of the parties involved. I’ve said repeatedly That welcome hearing from any party the fields that they’ve not been treated fairly by MOL in this regard depending on local practices demurrage Charged by the ocean carriers can be something of a pass-through from the terminals we pay the terminals based on their Tariffs and the relations, and then we we charge our customers separately in research in preparation for this meeting for this hearing I’ve gone back and starting with a series of say events you know going back to 2012 with hurricane sandy MOL has an aggregate absorbed more demurrage expense from the terminals than we have collected from our customers We’re net out-of-pocket here to say that this is a moneymaker a revenue opportunity for MOL. It’s not the case We’re not it’s not a profit Center for us Detention or use a term per diem here These charges are also intended to expedite the movement of containers and chassis x’ while the daily detention charge Yes, it does exceed the cost of the assets Whether it’s $3 or $30 for chassis. We heard yesterday the detention Charges are greater than that the reason for the detention Charges is to not hinder the proper movement of assets prop movement of assets back to where they’re needed for the next move The cost of the asset itself is not relevant here ocean carriers must maintain a discipline balance equipment flow what we call the match back or under a lot of scrutiny from our headquarters What comes in has to go back out? Largely on a vessel by vessel basis so that the containers are in the right place at the right time for the next movement Otherwise when we get out of balance when we’re not achieving the match back we can face very high operational cost for the Dislocations and great risks of not being able to cover down line bookings overseas. I’m going to this in a lot of detail At the right time we had the hurricane issues in recent weeks to cause Disruptions caused disruptions to our match back or under a lot of pressure now to get the boxes back for the Chinese New Year Rush and so forth Everything’s got to work seamlessly and fluidly to keep the network going that’s the real issue With these charges MOL’s business model most definitely is not built around collecting demurrage and detention fees We want to keep our assets moving we want to keep our network fluid Ironically some of the parties that press us on this side for special arrangements to hold on to the equipment Often at the same time are pressing for equipment availability to cover bookings overseas So we’re getting it on both ends similar to demurrage MOL attempts to avoid unfair charges for detention When return of the equipment is not possible and there’s same dispute resolution process applies here I want to be clear that demurrage and detention terms are subject to negotiation in the in the marketplace The ocean transportation market is extremely competitive If a party does not like how one carrier handles of the demurrage or detention situation the party is free to negotiate Different contractual arrangements party can may freely lease which to another carrier. Yes, there’s a lot of mergers gone on There’s still 10 or 11 major carriers out there. We compete fiercely within Across and within the alliances and each customer is going to have continued to have a large choice of ocean carriers four words The same does apply with marine terminals though. It is a bit more indirect There’s no question that many customers make carrier and routing decisions based on using or avoiding particular marine terminals for any number of reasons Any criteria that an outside entity or to determine as appropriate for Prohibiting the imposition of such charges is going to be subjective. We’ve heard a lot about gray areas What is terminal congestion? What is a weather event who’s going to determine that it’s going to be controversial? Anything any rules that were to get set up here Also situations such as severe weather events are disruptive and costly to all involved parts. We heard that yesterday I think how expensive this can be to us our own service providers our own vendors Don’t stop the clock for us when we face uncontrollable expenses for vessel heart higher and so forth Why are we the ones to be caught in the middle here? Why should we be be predisposed that we would be incurring the risk for these costs? Somehow that just doesn’t seem fair to me That’s that’s largely it again. I’d like to thank you very much for the opportunity to express some things here Good morning Chairman Khouri Commissioner Dye Commissioner Maffei my name is Paolo Magnani, and I’m executive vice president for MSC USA I would like to briefly Empathize the three specific points the demurrage detention per diem are indeed very very complex issues Ocean carrier still have cost when those charges are wavered or discounted those charges are differentiator upon which carriers compete Most do not realize the complexity of discharges since most customer operate only in one or few parts Let’s take an example for the demurrage charge There are differentiation regarding actual free days Some terminal operate using working days some other using a calendar or consecutive days So five days for example do not always mean the same thing Also some part consider the discharge date as the first free day some consider the day after as the first free day and some consider the time of discharge to determine whether That day should be counted or not There are ports that grant additional free time based on volume on the same ship Some other considered commodity and other consider the type of containers like River or platform and all differentiate by size a Few terminal also have agreement direct with clients the determine when their free time is extended Some terminal have true brackets of days on which the tariff increase some others three and some even four Incorrectly so because the space availability they have it is a crucial factor for them to operate To make things even more complicated there is an ongoing problem of The different interpretation on worldwide basis of the terminology in this case we are talking about the demurrage But what is really meant by the demurrage while in the USA. It is generally clear in other countries they referred to the demurrage as something entirely different and Consequently foreign shipper or receivers may be negotiating for a differently time than what they actually intended Ocean carrier still have cost when charges are waiver It is commonly misunderstood that when a carrier wave one of the charges like the detention or per diem. No body lose money That is actually not true the carrier in all case will have to pay Charges likely long term ease of the container the chassis if the box is mounted or the energy cost if the box is reefer Those are just examples Even just extending the free time it could have a very real cost to carriers another ship may arrive and the Box couldn’t that below some new boxes just discharged to deliver the container the line will have to pay the terminal and ditional charges to reposition the box on the top There are even more hidden costs especially if we differentiate between import and export So when speaking of waving or extending these charges it is important to ensure that everyone? Understand that there is only one sure payer the ocean carrier The charges become a differentiate or upon which carriers all of us compete I mention a number of difference and exceptions those could be seen as a negative but in reality. They are extremely positive first of all because they create competition among carriers Second because they give the opportunity to customer to choose between carriers depending on the condition in a specific port or a specific location under sending the various tariffs in charges of the carriers will lead to significant saving for shipper or receivers a Well-informed customer is one that is able to match the need of each of their client in their commodity with the best suited carrier Price alone is not the real differentiator the price plus the rule associated with it is what actually really count those charges in the way each line build them and Use them create a real competition among carrier and should not be regulated because this would distort those factors in the marketplace in conclusion it is my view the complex issue of demurrage the detention in per diem can be and Are managed effectively as a commercial matter between ocean carrier and other stakeholders? further regulation in this area is unnecessary in the marketplace can address this without additional government intervention thank you for the opportunity to appear here today, and there will be pleased to answer any question you may have Good morning Chairman Khouri Commissioner Dye Commissioner Maffei Thank you for the opportunity to testify this morning. My name is Howard Finkel I am executive vice president of Costco shipping lines, North America I would like to try to fill in some important facts that I feel have been missing from this discussion My first point is when it comes to the obvious clear-cut situations where Avett weather event Closes an entire port we routinely provide extra free time to our customers to return equipment That’s something that most terminal operators. Do as well on the demurrage side well We anticipate and are well a full informed of a weather incident. We have called the terminal operators and requests They give relief on demurrage these requests are taken seriously so the situation in my opinion doesn’t present the problem And I do not see any need for regulation When the situations are less clear-cut we look at them on a case-by-case Basis if the claim is we feel legitimate and the customer has made an honest attempt to return equipment on a timely basis But could not do it we have provided relief these kinds of situations vary from port to port and event to event though and I don’t see how you write a national regulation to address that I Have been involved in this business for a long time, and I don’t see a lot of situations where people can legitimately claim They have not been treated fairly My second point is carriers policies on equipment free time of detention are subject to intense Competition that are generally addressed in confidential service contracts shippers put tremendous pressure on us to offer free time It is considerably longer than theirs what in the tariff and will withhold signing unless we capitulate to their demands So this is not a situation where the shippers are pressured to return their equipment in an unreasonable time Most of the time with these extra free time clauses the shippers have plenty of time returned to return the equipment Even when there is a severe weather issue This is a bit technical, but carriers have also been asked to write and stop clock provisions into our contracts Which means when the shipper calls the carrier and states the container is empty? We then have to immediately stop the clock on that day And it could be the last day of free time we have situations now where a lot of shippers nominate their own customer nominated truckers and Sometimes when they have these customer customer nominated truckers They have these stop clock clauses in the contract now what we try to do in those cases is say, okay? This is the day the stop clock ends of course or when you call the the detention clock ends But you have 24 to 48 hours to return that equipment now if we write that into the contract That’s good, however We’ve been pressured to leave that wording out and we’ve had situations where shippers have kept our containers up to six months We had a situation where this happened the shipper tried to sign the next year with us We told them they’d have to make sure their customer nominated truckers returned the container within that time period they said we understand why you want that But we’re not signing with you, and if you if you put that verbage in the contract We’re not signing very unfair and we decided not to sign Another important point is because the market puts pressure on us to provide extended free time in our Contracts free time becomes a net economic cost for us it has been suggested by some that detention charges are a profit Center for carriers That is not the case we would much rather have a quicker turnaround Time on our equipment than having to calculate and collect the detention like ships containers cease making money when they sit idle When a container sits at a contained yard That’s a piece of equipment that can’t be used for us exporter or be sent back for another import load During peak seasons idling equipment becomes a headache not only for the carriers, but the u.s. exporter and importer if we were forced by regulation to extend free time even further That X that adds extra cost of the carrier and may put additional strain on the entire supply chain that needs equipment will be Available and flow freely I can tell you next week I’m gonna be down in the Port of Houston so getting about this huge surge of resin. That’s coming I’m gonna get you know I’ve been speaking about this for two years now And I’m sure the shippers are gonna be screaming Because they want equipment if you need equipment and a port the equipment can’t be sitting in a container somewhere Just with extra free time There is a misconception that the only costs associated with Excessive free time is just daily lease cost or capital a cost of the container This is not accurate as mentioned an idle container Musil means a lost opportunity To carry more equipment and to serve our customers better Putting these basics points together putting these basic points together excuse me. I don’t see a case for new regulation here I realized that the petition has several claims about port congestion weather slowdowns in the past But he didn’t see many specific examples of situations where carriers could be characterized as being Unreasonable it should be noted that today. We are not experiencing the chronic port congestion like we did in 2014 and 2015 when you combine that with the fact that the market is already requiring carriers to both provide extra free time just Costly, you can hurt equipment availability during certain peak periods I don’t see the case for more regulation I Hope that instead of issuing new Regulations based on what you’ve heard on this petition The Commission will encourage supply chain members to communicate with their carriers if they think that a particular Carrier has done something unreasonable And if that doesn’t work go to arbitration or go to court or file a complaint with the Commission The last weather isn’t it was a case in point in Houston Shippers did file grievances with the Commission CADRS Department. I was involved in this every day shippers called who had some problems in Houston Prior to the hurricane we actually called the Port of Houston and said we would really like you to consider Canceling demurrage or extending the free time it wasn’t honored right then but after the incident and after we had conversations with the shippers the Port of Houston did consider it and Right now we were actually issuing refunds to shippers for that is that issue My last point is that I think it would be a mistake to issue new regulations, but if it goes this route It is critical the carrier’s do not get stuck in the middle of terminal the demurrage charges Yes, we do collect these charges, but at best They are passed through cost for us especially considering the Administration cost of managing these charges if a terminal can levy a Dem demurrage charge the carry has to be able to recover that charge If you were set up a situation where this was not addressed it would place an unfair financial burden on the carriers Would like to say have been in this industry 37 years and I review every single contract we have with Shippers goes through me and a lot of times the the sales reps say we don’t understand while you’re arguing with Us about free time. It’s free. There’s nothing free about free time. We should probably change this the container dwell time I appreciate the opportunity to address you all here today and would be happy to answer any questions. You might have Good morning Chairman Khouri Commissioner Dye Commissioner Maffei, thank you for the opportunity to testify today My name is John Butler. I’m president and CEO of the world shipping Council The council has filed two sets of comments in response to the petition. I’m not going to try to summarize today everything We’ve said in those papers what I would like to do is to highlight a few key reasons why the petition should be denied I? Understand that the Commission is interested in port efficiency broadly But we’re here today on a specific petition, and I think it’s important to address the details of that petition the petition asks the Commission to transform carriers and marine terminal operators into guarantors or insurance providers for weather events labor disputes equipment shortages and government cargo inspections The Commission should decline that invitation on the grounds that the relief that the petition seeks is unsupported by the law and effects In addition granting the requested relief would be bad policy on the law The relief that the petition seeks has already been rejected by the Commission in the very case that the petitioners rely upon most That cases in 1948 New York one case which the petition cites some 14 times in The New York case the u.s. Maritime Commission found that it would be improper to place responsibility on carriers for delays associated with pest quarantines Food and Drug inspections customs inspections truck congestion and port congestion in Short the very case the petitioners rely upon most stands for the proposition that the Commission should not grant the petition the Other important legal point is that the petition offers a legal standard that is inconsistent with the shipping act the touchstone for the petition and for yesterday’s testimony Is whether a delay is quote not the fault of the shipper or the truck? It is correct that someone seeking relief from the Commission can’t have caused the problem that they’re complaining about But that is only the beginning of the analysis not the end in a section 10 D 1 case The statute requires the Commission to look at the behavior of the marine terminal operator or the carrier and to ask whether that behavior is Unreasonable the focus is not on the fault or lack thereof of the shipper the standard that petitioners have offered looks to the wrong parties and As a result the petition provides no useful guidance to the Commission in Deciding what carrier and MTO practices are just and reasonable and which are not That is a fatal flaw and the Commission cannot adopt a rule that Uses the not my fault standard as its foundation on The facts the world shipping counsel in its first set of comments Address the facts presented in each of the verified statements attached to the petition almost without exception the verified statements demonstrate either that disputed charges were substantially waived that the delays complained of were caused by the government or that the delays had been caused by labor slowdowns or weather The most common demurrage trigger raised in the testimony yesterday was government inspection of cargoes Something that cannot be laid at the feet of carriers and marine terminal operators Those situations would not result in relief under any rule that could be drafted under the applicable statutory authority and the Commission’s own precedent There has been a lot of frustration expressed And I understand that the frustration is genuine, but the record here is very thin in Terms of how often there have been situations that are arguably unreasonable under the Shipping Act Finally detention and demurrage charges The situations that trigger them and the resolution of disputes over those charges are very fact-specific There is already a mechanism in place for an aggrieved party to bring a complaint to the Commission Where a proper review of all of the facts can be made? That has not occurred no party has brought a reparations case dealing with the detention and demurrage at the Commission in recent times and As a result the Commission does not have the experience of litigation to help it to find the issues In no small part because of the work the Commissioner Dye has done with the supply chain innovation teams There is substantial work being done today to make America’s ports more efficient The trade press regularly reports the efforts to create those solutions From new software products for managing free time and container movement to the trucker appointment systems being considered in New York and New Jersey to the port wide information sharing system being piloted by the Port of Los Angeles The marketplace should be allowed to continue to address the many complexity complexities of these issues at the end of the day the petition asks the Commission to wade into the business of Allocating commercial costs and risks that are today allocated by the market This petition does not make a persuasive case for the Commission to accept that invitation and the Commission should deny the petition I Appreciate the opportunity to testify I’d be happy to answer any questions that you might have Thank you, thank you, thank all of you for your for your testimony for being here today Yes a number of questions I Likewise have Have wondered with the millions of containers that are coming into the country every year Progress that one has made since the Acknowledged Long-running labor dispute in California from late summer of 14 into 15 and But There was reference made I think we started with With you mr. Craig Could you talk another minute or two you when we went through the Southern, California situation when excuse me we the Commission Went through Hurricane sandy and a lot of those issues Hanjin I’m going to say it was just such a unique Mess I won’t use some of the vulgar terms that Enough for vulgarity but the hurricanes in Houston I know, New Orleans shut down All those and then you you have one after another And I know I have personally my professional career of implementing hurricane shutdown procedures And then getting back up It’s quite an undertaking and We did not hear Dislocations What happened were they lessons learned and these were some very severe hurricanes talk to us about? demurrage and detention after that series of hurricanes this season And all three please I think Howard articulated Probably better than I did some of the proactive steps that were being taken I do think collectively We’ve all learned a lot going back to these series of events starting five four five years ago We had the the group in New York that put together much better communication a more proactive program and so forth nowadays we get Pro-pro when we see something coming most of the major terminals and ports will pre announce the terminal is going to be closed that there’s going to be a waiver of demurrage We in turn reflect that in our own Systems both for demurrage and detention so we we proactively stopped the clock the meters not running So to speak during that timeframe for both both types of accounts and Therefore there. There is no charge for it this is Working again. We’ve all learned over the last three or four years. It wasn’t quite like that perhaps in say 2013 I think the winter of 2013 in New York was probably the next big one what we all learned a lot from that now To my knowledge I mean Houston I we don’t call Houston, so I’d have to defer on that one but certainly on the East Coast in Recent years. I think this whole process has worked a lot better Dislocate we’ve had huge dislocations operational Dislocations that have been very expensive to us that I alluded to a few minutes ago that we have to address, but that’s our problem To get the boxes back get them back to Asia deal with the schedule Disruptions and so forth, but I think in terms of how we charge the demurrage and detention under those circumstances For that time frame when the terminals are not operational. I think has become I’m sure seamless is quite the right word, but we’re we’re pretty well along in that regard I Can indeed confirm. I was what Richard mentioned there are already Let’s say automatic things that happen when an event It’s a trigger like a snowstorm a port closure or a hurricane and this event let’s say black and white and we Automatically as a carrier at least the practice of MSE is in this case to extend the free time and not to bill a demurrage detention or a per diem and when a terminal is closed or a container er disclosed or a rail ramp is closed for that matter I Just like to add that as mentioned we’re an intense competition with each other even amongst the alliances the Competition is intense the last thing you want to do is is be a carrier that That is strict on the demurrage and doesn’t give any relief when when there are natural disasters We’ve learned this You don’t want to be sitting in front of a customer trying to sign sign a service contract when they think you’ve been unfair to them As mentioned in the Houston situation we knew it was coming We try to get pre relief from the terminal that was wasn’t a hundred percent We first talked to them as soon as the event was over We started hearing from customers we heard from your CADRS department And they basically said this one particular customer was very upset, and I said we’ll take a look at it But you understand that the terminal we still have to pay the terminal and they mentioned well You charge them I said I understand that but we have to pay the terminal so we had discussions the terminal came back and said yes We are going to give relief give us the issues It was actually a lot of work, but we did it and checks are being cut for the shippers now, so we’ve learned were are extremely Active as far as trying to make sure our customers are happy and I said if if we had to If we have a feel of a reputation of making money on demurrage or detention that Shippers not going to want to sign with you you have to be commercially sensible And I realized what the shippers problems are and I think carriers have been You know I must say you understand that we’ve been hearing that there is limited if any ability to negotiate There’s been prior testimony on these issues If I may from a different perspective Just comment We like to hear and see Competition not just by and amongst the alliances we want to see competition by and amongst each member inside of the Alliance, and that’s the Key areas that we want to see in terms of competition Let me go to because I just happen to have an opportunity and you mentioned that your your tariffs, and how you The I Don’t know if you’ve done this analysis if you were to take your tariff and put it beside the petition Are there differences in your tariff and the petition Mr.. Chairman, I’ll step in on that one because it’s it’s a combination I think of a factual question and an legal question. That’s fine I think in terms if you understand what I’m we’ll find out in a minute Whether I understood your question You may be referring to some provisions in the tariffs that speak for example to weather events when the entire port is shut down In that sense and I think you’ve heard the testimony today What’s being asked for has already been granted by not only carrier tariffs, but also terminal tariffs, so I don’t see any problem there and therefore I See no reason to regulate where this gets a bit more problematic is if you really look at what the petition is asking for if you look at Exhibit A to the Petition and this goes back to something I addressed it my testimony The events are one thing I mean one of the things that the petition says is an event or trigger for free time extension is Delays as a result of government action or requirements That’s something. That’s completely outside the Control of the carrier or the marine terminal operator And as I discussed in my testimony and as was discussed yesterday the Commission has never placed responsibility for those things on carriers and terminal operators The other problem with the petition is that whatever the event is that’s the trigger? The standard that they’ve asked you to adopt is It’s not the shippers fault But that’s not the proper standard under the Shipping Act the Shipping Act asks Whether a carrier or a marine terminal operator is doing something unjust or unreasonable? so Fault or not on the part of the shipper sure they have to come to you with clean hands But that’s not the analysis if you were going to place a restriction or issue an interpretation of section 10 D 1 you have to address the carriers of behavior or the terminal operators behavior and the petition Invites you to completely ignore that part of the analysis. I can’t do that and perhaps this would be a Rather than me try to pass back and forth what I have in front of me one of those where we can do a post hearing Question and give you time to you know analyze think about and address the rest of the issues Testimony yesterday there’s Appointment systems and there are Scenarios and and examples that For me personally are quite troubling assuming the issues are all True and I’m and I will I go back to mr.. Craig’s point of How often is this? happening and calls for transparency, but Could you address for a minute those situations where with the growing prevalence of appointment systems and Beneficial cargo owners saying We call for appointments And we’re told none are available This week it’ll be next week in them the appointment. That’s available is outside of their free time Can you just in perhaps in general? Talk about your experiences with those types of factual Situations I’ll start It’s hard to generalize here these situations are on a case-by-case basis, okay? I think what we were talking about before a given event then we make mass system updates And everything is adjusted from there after that it really becomes a case-by-case if if a particular Party has a legitimate grievance they come to us with the situation we have a point of entry we have a process we have people that have a Limit on how much they can agree to Commit to and you know there’s a hierarchy on this so basically it’s all on a case-by-case basis And the individuals are empowered to say yes, this is a legitimate issue Yeah, you shouldn’t have you will waive the demurrage will waive the detention in this case for for so much money So these are done on a transactional case-by-case basis where this sort of situation comes up To answer more directly your question related to the appointment system I am part of the escalation process in Mediterranean shipping company whenever there is a problem or Dispute on a demurrage or detention charge. I’m actually the top escalation Point and I often deal with countries on this issue and many issue and I have to say that so far I do not recall receiving any particular high amount or any particular Excessive amount of complaints related to demurrage or the detention or per diem Related to the appointment system in in California. I do not have a recall of of this Very similar comments here Believe me if if if this was an issue would get to my desk and I be coming you know intimately involved with it I Can also say that? We’re in this learning process now. You know Before OSRA a lot more cargo moved via tariff and now it moves via service contracts and a lot of these issues Every year these service contracts get a little bit more sophisticated because when shippers say oh, we have a problem here Let’s fix it in the service contract and of course. I’m the guy who say ok That’s reasonable, or it’s not reasonable, and you’re just like the the stopclock thing You know I think a lot of carriers and ok stop clock And then they have another thing whether it’s a customer nominated trucker and the carrier’s didn’t think oh Let’s make sure the customer nominated trucker has 48 hours to return or else they can keep the container forever, so it’s something That’s evolving but I can tell you I have this issue has not come to my desk I Don’t have anything to add on the Operational side the only thing I would say is that I believe that I mean maybe appointment systems used to have a bad name I think now in many cases. They’re seen as part of the solution and so I would just urge you to be Very deliberative in considering possible rules and regulations Surrounding the operation of appointment systems If people think that it’s going to turn into a situation or no good deed goes unpunished You’re gonna have fewer appointment systems, and that’s going to lead to more delay Not less so I understand the conceptual issue of if you had a situation where people Were routinely being told on giving appointment in nine days, and and you’ve got five days free time Well, then something would be a out of wack but to to the points raised by my colleagues You’d want to really make sure that that was a factual situation that was occurring before you tried to address it I haven’t heard anything yet that indicates that that’s at all a common situation Thank you I ran over my time Thank you very much Craig I’ve heard you several times discuss your company’s approach On demurrage and I’m having a hard time figuring out how your approach? differs from What the petition actually asks for? When it when they And I’m I’m not reading from the petition itself This was the handout that the that the shippers actually circulated yesterday so if I have you got a disadvantage I apologize Because this is not an inquisition Despite I’ve sat in your chair, and I know it can feel like that, but it is not that If the the disability is caused by an event or circumstances that is beyond the control of the shipper then The failure to extend free time would be considered unreasonable Are there events that are beyond the control of shippers Where you don’t on a case-by-case basis? consider waiving demurrage Where it’s out of control of the shipper on a case-by-case basis, right It’s hard to general I mean we try to be accomodating I think you know how it again. You know spoke well We don’t want to lose business here This is relatively in the overall scope of things these are not big items We don’t want customers Upset with us over an issue like this. Yes, we tend to be Accommodative we don’t want this being held as a gun to our head at the next service contract negotiation because this is not really what’s what’s at issue so I’m not going to say we’re a hundred percent. I think you know again. We have people we have a group that Handles these issues. They look at the pluses and minuses, try to make the right decision based on that are Certainly the philosophy the intent is to be accommodative and is in the intent is to be reasonable I think that’s about as much as I can share sure you have any idea how much it costs you to Administer all this all the the case-by-case too much Right we’ve probably I mean we’ve got a group of people that handle a lot of issue You know we’ve got a group of seven or eight people call our care team, and this is one of several realms of areas they deal with You know if you want to equate it to a head count or something like that Maybe a couple people something like that But it comes and goes based on how well things are moving and if there’s a lot of issues There’s a lot of activity there if things are humming well then then not so much you know in recent months It’s been relatively quiet so maybe not so much there, right Right because I do think that I mean you’re here you heard the testimony yesterday that there’s a lot of after-the-fact frustration in getting a Prompt resolution sometimes bills Rather rather than having cargo held up. There are bills that are sent out months after the fact And that resolution process is Something else I guess Howard. I’ll talk to you about yours how? What do you have to say about that? We we have a department that looks after this does the billing It’s such you know. It’s a considerable cost to us We don’t have too many cases where we send out bills you know Way after the fact we try to stay on top of this And truthfully the the shippers will will stay on top of it too because if you are doing things months after the fact You know memories are not so great and people don’t remember exactly what happened And you don’t want it to get into a situation where nobody really remembers. What what happened. That’s right You know we you you ask the question You know is there ever a situation where the shipper does have a real grievance? And we still have to charge I can say very rarely but sometimes and sometimes is when the terminal does not give us relief and There are times when even when the terminal doesn’t give us relief we will refund that money because we know that The shipper is very sensitive to this and we may not be able to negotiate a contract next year And we basically lose the money because we have to pay the terminal But it’s not a situation that happens very often, right Um Paolo, could you could you describe your resolution process about how long that takes? And how much you estimate that you? How much it costs you and your company to to resolve these? We do have quite a sizable team that follow to demurrage detention and per diem It’s all based in the United States and all together between a billing collection in dispute resolution We have a team of over 30 people So it’s a sizeable cost and a big operation for us Our dispute resolution team is dedicated Exactly to this department, and they are specializing in this department And they have guidelines to ensure that we behave with Fairness with all the clients so for the same situation we have the same resolution and In the intent not to discriminate obviously any any client, so it’s a complex issue sometime Compel it as well by the fact that The building is based maybe on EDI and you have to investigate EDI transaction between a Depot in the line so sometime we can take It can take longer than what you wish but my experience when we deal with CADRS in the past is that within a month month and a half usually we have a resolution Maximum and this is for the most complex situation involving, maybe those of containers, okay, thank you Thank you Yep, the the Chairman Howard had pulled that had referenced that your tariff was one of the ones that was pulled out When the carrier is for any reason unable to tender for Delivery during free time free time will be extended for a period equal to the duration of the carrier’s inability And there are a couple of others that were pulled out along those lines, but the petition Asks that if the common carrier or marine terminal operator is unable to tender For delivery or receive equipment and the disability is caused By an event that’s beyond the control of the shipper, which is actually a little bit narrower The free time would be extended Anything else anything else that i’m missing No, but as I said on real-time that is that is happening? And and the competitive nature of our business is I Mean we’ve had situations Where a shipper has extended free time? Why more than is probably reasonable and then maybe an incident happens and? The With within the period of that free time the incident is settled, and then they’ve come back and said well You know maybe we have Thirteen extra days free time but since you know there was an issue we want fifteen days But the issue was already settled so you get sometimes caught into these technical issues where you know we’re really trying to be reasonable as I mentioned free time is not free but it’s something that we compete and we the the Chairman’s remarks Regarding, you know he wants competition not only between the alliances But in inside the alliances believe me this this intense competition going on between there’s no difference happening between the each of the alliances and within the alliances we compete savagely To the point of a lot of times we lose a lot of money And this could become a real money loser as far as free time because it’s say it again There’s nothing free about free time. Yes. Thank you John Commissioner Dye if I may I mean the questions been asked twice about the difference between certain tariff provisions, and and the relief sought in the petition, and I just want to make sure that we that we recognize that there’s a huge difference between commercial practice and Call it a regulation call it guidance Etc any official action by the Commission is Used in the request is that the Commission essentially make a statement that one way or another? Says you can do this, and you can’t do that. There is a huge difference between the flexibility that’s available in a commercial context and First of all what the Commission could or should do with respect to a Regulation and also what the effect of that would be on the market because anytime you limit flexibility That the converse is you’ve just reduced competition And that’s that’s an absolute I mean that’s what happens when you tell people you have to do things a certain way and You can The petitioners might argue. We’re not telling you to do it a certain way We’re just telling you what you can’t do at the end of the day the effect is the same And I just reiterate I know I’m repeating myself, but I think it bears repeating Some of the things that they are asking the Commission to make carriers and MTOs take responsibility for are things that the Commission has previously rejected laying at the feet of carrier MTOs There was a big discussion yesterday about government inspections. I don’t see any Argument that can be made that the Commission would accept that it’s unreasonable For a carrier or an MTO to refuse to extend free time if the delay is caused by the government It’s just the most obvious example, but you also look at this petition the triggers port congestion how much port congestion? How congested does it have to be are you gonna set metrics for? changes in throughput who decides When do you decide I mean if you get sucked into this it has repercussions for how do you? Apply these standards And if the idea here is to get more clarity so that people know what the rules are I? Think you would very quickly find yourself having created a lot of confusion Thank you, my time is expired I Appreciate it. Thank you Thank you before I turn it over to Commissioner Maffei if I could with Mr. Butler because I read the 48th case rather carefully There was a very interesting Section in there they were talking of the Commission my predecessors were talking about The situation with certain cargoes coffee and tea and that they do require Often that require. They’re often subject to government Inspections before released and what my predecessors said then sure is Why should that be? that Burdened I believe is the word they used transfer to the cargo interest Excuse me Transferred I misspoke transfer to the carrier interest But then they put something in that said that is not to say and it’s not for the commissioner to say one way or another but the carriers may decide to voluntarily look at differences in This particular area so in 1948 they had the foresight to look all the way out to 1998 when The carrier’s did then have freedom of contract And it sounds to me like they’ve taken that Do the math for me 40 something hour 60 something year? So, but the Commission was saying voluntary situations on behalf of both carrier interests and cargo interests Maybe the solution to that particular situation so It’s a very interesting case. It’s worth reading more than once I Agree, it’s an interesting case and I think it’s also interesting that it’s the one that the petitioners rely upon and when you read it more carefully It’s a bit more complex With respect to the coffee example. I mean happy to look at at Maher terminal tariffs, and I think all the New York New Jersey tariffs are the same they still have and they were probably put in there and 1948 there’s still special provisions for different commodities, and I’m sure my Colleagues on the panel know more about this than I do but coffee is one of them I mean so this has been addressed commercially you’re right I Would like to end that is something that that was not covered Putting aside extra free time which is in all probably far too many contracts as far as I’m concerned Not as far as our sales people are concerned we we get issues with certain commodities that are very sensitive and have to sit on the terminal for a long period of time I go to my operations guys, and I say look go to this terminal and see what you can do and most of the time if it’s it’s a situation That’s not going to cause undue duress to the terminal we will get special permitting provisions for specific commodities and they I’m not as involved in coffee and cocoa I used to be when I was with Sealand but Costco doesn’t have a really big north-south presence and that’s where that a lot of that is coming from but there are provisions in tariffs for the the terminals and The carriers have gone to the terminals when it’s not so clear-cut when there is special issue. I mean right now We’re bringing in subway cars from China that are gonna. Go all over, New York and Boston and Incredible night nightmares with getting this stuff off the terminal We’ve gone to the terminals They’ve been very flexible in getting this stuff because we want business to flow we don’t want Congestion at the terminal, so there are special provisions made depending on the commodities Thank You commissioner Maffei, thank you Thank You Mr. Chairman, and thank you to the witnesses Very good statements so far look obviously there are many areas of disconnect between What we heard yesterday, and what we’re hearing from you gentlemen one area Seems to be the capacity of shippers and BCOs to contact to have to contact you if there is a Dispute or they feel that they should not be Charged because of what whatever reason and you gentlemen all Seem to be saying and forgive me if I’m over interpreting But that it’s very easy to contact you and that I think you said Mr. Magnani either You’re the person who actually gets all these calls you’re as high as it gets. You don’t have to contact Geneva You’re it you can grant the relief so So I guess let me ask all three of you or four if you want to come in to John but what is the process for contacting you if I am a Shipper, and I think gosh, you know I’ve got a good case here. I’d need some more free time Go first I’ve been in this industry 37 years most people know me Your CADRS department knows me very well. They’re on the phone with me all the time they get any Complaints they call me directly I deal with the complaints directly Does every shipper have my number? No I? Never get any work done if they did but it’s fairly easy to get in touch with me and if it goes to the sales rep And there’s and there’s a real problem it will come to my desk and I have not Experienced long delays and not people not getting to the right people to make a decision Mr. Craig Mr. Mangani Sure, I think we’re similar. I’m also part of the escalation chain and Only a very serious issues, and they tend to go back a few years of they they got in that far There’s a number of entry points be BCO or BCO through our salespeople Could be through our customer service a trucking company. It could be through our carrier services group You mentioned something called a care team? Yes, what’s that? That’s our group in Atlanta customer service. Can I reach that with an 800 number you? can No not directly you would be getting you would be more into the General customer service and based on the issue they handle special issues high-profile customers high-profile service issues and dispute resolution So a customer service rep a sales person or an Operations person working with Trucking company would hand over a dispute to this group okay And then they they assess the issues and make a conclusion from there as a similar Mr. Magnani It is indeed similar. I would say that probably the most Easiest part of the path of least resistance for our client is to go through our Sales rep the sales rep visit regularly all our accounts and they have a good relationship So they can start, but the issue is is what we heard yesterday I’m not saying any of that all that makes some sense and but the issue is is that if you’re picking up one of these Containers and you’re suddenly given these charges you’re not sitting in an office able to you know call somebody or you know look up the number and And then put it on speakerphone until you get through you’re sitting there. You know being asked for a large possibly a large payment in your truck I Mean is there any if there was an easier way to get through that that might be helpful If there isn’t because there could indeed be a legitimate issue There could be indeed legitimate issues and Let’s make an example a trucker Claimed to be in line and the claim that he is rejected in the terminal in all our terminal We have an MSC rep so if we get contacted in the very moment our rep can verify if indeed there is in that moment Issue at the terminal, and if the issue is in the legitimate we take? Action if instead we consider the issue known if you are the trucker is nowhere to be seen in in line Obviously we’ll take a different Different action okay another area of disagreement seems to be the cash well I’m not sure if they’re of disagreement find out the cash on the Barrelhead that If there is an issue where a shipper or somebody picking up the cargo Believes that there should be free time granted They still have to come up with the full fee of paying for instance the the drayage or the Demurrage or any of these they have to pay the full bill in order to get the container or The container you know they won’t be allowed to take the container That to me could be it seems a little unreasonable at times why not make it half the bill And then you can work it out later. I mean it seems like you know to take the entire They have to pay the entire thing and and at that point you don’t know whether they have a legitimate argument or not Then care to comment there Or. We just an agreement will make it only half. You only have to pay half I’m not gonna make that agreement right here, but a lot of times. I mean cash on the Barrelhead That I mean It it rarely. I don’t remember hardly ever that kind of situation happens a lot of people have credit In our contracts we specify who pays this free time you know is it the shipper or the trucker the shipper has to nominate that and Usually when there’s a problem where we’ll stop someone at the gate. It’s because there’s been a severe delinquency It’s not just though you know he didn’t pay the last demurrage bill. It’s a severe delinquency That’s when as far as I’m concerned when it comes to ahead. It’s not the general course of business I Think demurrage in a lot of cases it is cash on the barrel. I think to release a box Terminal will require cash. We’ll have to be part of that Often we’ll tell the terminal release it on our behalf And we’re on the nickel and then when there’s a dispute. We’ll take the risk and work out the Dispute resolution, and it might end up costing us money, and these are decisions. We’ve got to make and make pretty quickly Detention is not that that is all after the fact and boy That’s a tough one when we we have a lot of resources in the building so you’re taking the rear in essence Taking on the risk They’re a hundred percent and that is a huge Endeavor on our part to go after those bills and the receivables and and track those down very laborious very administratively intensive, so Certainly there’s leverage on demurrage in a lot of cases and Yeah, I agree. It’s not something we want to discuss probably changing that practice right right at this point in time To clarify a lot of contracts actually Specify if there’s demurrage issue the carrier will will take care of it and bill us later that’s specified in a lot of contracts a Message is clear ago. The carrier. Well. You are the carrier. Yeah, okay, and a lot of times They will put in the contract, okay, so Not only did not have you you have to guarantee the demurrage, and then we’ll negotiate it later That’s in several contracts and well, I’m gonna register it. I’ll ask the same thing of the terminal operators I mean obviously if you have to pay the full thing you know that it’s a lot harder to say to you You know well pay half will pay the fault. I mean I understand I understand that But but there is it there does seem to be a disconnect and I think we can you know we’ll One of the things that we’ll try to do as a commission is kind of find out which one of you is Right now obviously we’re talking about you know thousands of individual cases And I’m sure they are right on a few cases and you’re right on a few cases, but in the you know in the middle It’s it’s kind of either one or the other Let me ask Mr. Magnani you mentioned how different some of the definitions are of these terms Both in the United States among ports, but particularly if you go around the world would it be useful if the Federal Maritime Commission worked with its international partners to try to at least standardize the language so that a shipper would at least know that If it’s a one you know with they’re getting three days demurrage what three days demurrage means is that is that helpful? organization in the standardization in the language definitely would would help We’re studying our own internal Standardization to try to avoid this this problem in the future, but indeed that could be a benefit know Mr.. Butler with the world shipping counsel have any role there or any other the your colleague organizations I Just wouldn’t underestimate the amount of work you’re talking about we’ve been involved in the Negotiation of a number of international trees it’s not to be undertaken lightly And if you’ve got something that’s not legally binding It’s not really good for much the other thing is that even if you were to get agreement on what terms meant You would have to educate everyone in the world as Mr. Magnani said part of the problem is people shippers in other parts of the world Look to the meaning of those terms and their countries and make assumptions about what they’re negotiating in terms of their you know US operations based on that other Meaning, that’s just the beginning because as Mr. Magnani also said okay, we can all agree What demurrage and detention and per diem might be? but I Think most terminals and most carriers have huge differences in what’s the first day is? The is it the four four containers is it the first day that operations begin on? Unloading the ship or the day that operations are completed Sometimes its calendar days sometimes. It’s working days You know you can go on and on and this I okay. I presume you’ve only touched up Yeah a small piece of it. I’m not sure that I think you’ve answered. It’s worth the squeeze now. You’ve answered the question Well, but I I’m not sure if the fact that it’s so difficult Means that it wouldn’t be worth it given that that might resolve a lot of these issues anyway My time is up and I look forward to the second round of questions. Thank you Thank you my next question was on the Prior testimony that we’ve had of the how the the ancient Admiralty Concept of possessory land was so inviolate I’ve had the experience of Making those choices let it go or not But really from the from the back-and-forth that I heard Richard John once again this was One of the panels that came up three or four different times in the term was transparency, and I wondered if there was really Transparency in this I keep making notes is so how often is this actually? Happening that cargo was being held He paid this bill Before we would let the container off the terminal grounds Any guesses, I mean this this may be again a separate issue that we take up post Post hearing but a part of mr.. Butler’s admonition is before we do regulations that apply to 255 plus terminals that are registered here the Federal Maritime Commission is stop and think about it So if you if you could address you know the Issue of you not leaving with that container until you pay X dollars I’ll have to be frank. I haven’t researched that we could probably Dig into it and provide some more. I just think that the vast majority of transactions are not controversial It’s understood a box sat on a terminal for a reason costs were incurred for a reason people understand that people paid for it and Everything happened the way, it was supposed to including providing cash upfront Or it was necessary the proportion of the time where that happens versus where we have Similar arrangements that Howard referred to where we go back and collect it after I’d have to do some research I don’t want to throw a number out here without having had the opportunity to spend a little time on it and just to not to belabor the point If you were here for testimony yesterday Mr. Pisano and his coffee company The situation he laid out He is totally credible. I believe had happened exactly the way he laid it out Mr. Roche with mohawk I have No doubt that the factual situation he laid out Happened exactly the way. He said that doesn’t answer the question of Is this are these outliers that are? extremely frustrating to American importers and exporters, but How are we going to handle this from? Getting two of us up here to agree on it on a regulation that’s going to apply to the entire United States Supply chains Separately the question remains you’re still saying you don’t see see this on them Often enough basis that you come in is that your the answer for the panel Dispute that situations like that could occur but again, I think we have means of addressing and Dealing with them to reach a mutually satisfactory conclusion after the fact yes there are Issues where somebody couldn’t pick up their container and feels aggrieved because of it Well work the issue out well. We’ll find a solution here, and I think we do that most of the time We’re not When I was in college I worked in retail we’re selling stereos, and it was like Oh, just sell it and you never want to see the customer again Make as much money as you can and you never see the customer again, and when I finally got into Graduated college got into this industry. It was like Oh sales I didn’t really like sales too much because I didn’t feel we were fair to the customers, but Here, I mean who we have relationships with our customers if you’re gonna be doing things like this and not giving consideration When they have a problem you are not going to keep that customer So are they situations that happen yes have they been contentious issues yes Sometimes you know I’m not saying work completely without fault sometimes our fall sometimes It’s the shippers fault but generally or in a very competitive business, and we try to work these situations out Who is the the lowest level customer service Representative in your company that has authority to to Compromise charges We do have specifically for demurrage and detention, the demurrage and detetion manager or any line manager for a specific Trade link so your your your low level customer service folks are empowered the customer service are in power to do the research and bring the case to the attention of the manager and so, that’s One tier up to one tier one tier up. Thank you We have coordinators in our customer service group that have a certain dollar authority to make Decisions basically on the spot, and so that’s that’s those are frontline people okay just like MSC said the the Person at a clerk level will not have that authority they’ll have to go to a manager, but it’s one level up okay great Okay, thank you Can I just continue that so that so the truck is at the out gate, how fast does that whole process happen? Not that fast Day at least days could be weeks to be frank so no it’s not gonna the customer wanting to get my box this Afternoon no the the dispute resolution is gonna It is after the fact. It’s not during the fact Okay one last this was a commissioner Maffei If one were to sit down with a Industry group of any description is this first-day issue one. That could be just as easily resolved as Is this really an issue that Causes problems in terms of difference in definition from one place to another Or all looking at each other as if we don’t understand the question For the first day of the first day of free time running You know is that the day of? Is this an H this differential from one terminal to another As to What is day one of a free time it would strike me that that could fairly easily be? be addressed if if uniformity were the The object I’ll let my colleagues speak to this and let the terminals speak to it, but if To go back my only comment is this if you want uniformity it comes at the price of competition These things are different not because people are trying to make them confusing they’re different because these provisions have been adopted in response to commercial pressures over the years And that’s why you see different provisions in different terminal schedules and different service contracts and and a different carrier tariffs, so with all of this I Mean at some point. There’s a question of Commission authority Telling everybody to do the same thing, but even before you get to that There’s a question of the of the wisdom of trying to make everything the same I’ll stop there and pass it on to the rest of the panel I Can bring an example a port a small port in the East Coast and the large port in the West Coast The East Coast part may have a rule that Let’s say the free time start as soon as all the containers for the ship are available If the West Coast would adopt the same rule with operation on a very large ship that will operate in the terminal for five Six days it would take a long time in those terminals those container need to be evacuated as soon as they are available So that’s why we have different rules in different terminal I will attempt your speak but as well this depends on how they are organized if they have grounded operation mounted operational chassis or in their equipment, so I Would believe that it would impede as well to compete free of me Thank you that Resonated with I understand that point very good I don’t think much to add. I mean certainly Standardization wouldn’t hurt It’s not a big concern for us frankly. I think we can we manage it Maybe perhaps many of the people yesterday that were testifying might be in a better position to say is that really a cause for confusion or Problems because one terminal defines it this way and another terminal defines it that way But from our standpoint. It’s it’s not really a serious problem Thank you, thank you mr. Chairman, and thank you for that that line of questions that I do would at least in terms of myself as a commissioner invite any of the people who testified yesterday to let us know whether that is indeed part of the problem and and You know I can’t speak for the Chairman, but mr.. Butler what I’m talking about. I’m from a uniformity of definition and That would be in order to allow people to know what they’re getting And you know fuller information helps markets work, so I’m not talking about something with reduced competition I’m talking about something that just makes it clear What what what people are getting? That’s why we’re always talking about transparency Not because we don’t believe the markets because we do believe in markets and my only point I’m not trying to be argumentative, but my point is Definitions are a sufficiently small part of the overall Consideration that I just questioned whether taking that on and that’s a big lift by itself Given everything you’ve just heard about okay, then how are those definitions used, okay? We all agree What demurrage is we all agree what detention is we all agree what per diem is? a couple of points one is That’s just the tip of the iceberg and then what’s the first free day mr.. Bond Yanni’s example of if it’s when the ship commences operations or finishes operations people For operational reasons and commercial reasons will differ with respect to that so you only created certainty with a very small part of the issue and it’s not Really the moving part, okay? I understand you made your point well Yeah, okay, mr. Butler the world shipping Council in its written comments suggested that the Commission lacks the authority to issue the proposed the rule proposed in the petition because of the differences between section 17 of the 1916 Act and section 10 D 1 Is it the WSC’s position that the Commission also lacked the authority for other regulations that has issued since 1984? under the authority in Section 10 D 1 Or are your assertions limited to this proposed role? I’m sure you familiar with the movie Cool Hand Luke We have a failure to communicate here. We do not question the authority of the Commission to adjudicate or provide guidance on 10 D. 1 okay a lot of what we talked about in her first set of comments was the difference between An interpretive rule and a legislative rule And I think there’s been some confusion around that we tried to clear that up in our second set of comments that was provided in response to the Petition to supplement the record so I want to be very clear about this You do have the authority There are things Frankly that the Commission has never had the authority to do for example. There was a lot of discussion yesterday about the level of Detention and demurrage charges, and I don’t think anyone is seriously asking you to set those levels, but if you look for example at exhibit a of the petition and Subsection D. It does invite you to decide what’s compensatory what’s penal and How much you can charge in each box if you start down that road you are gonna find yourself in a rate-making activity that the Commission really has never had the authority to do so we just need to be careful about what we’re talking about When we talk about it? okay, that points well-taken and And you brought up earlier in your testimony that that the lack of fault of shippers is is not an appropriate standard But rather the on whether a ship carrier or an MTO has been unreasonable What if we were to adopt general guidelines simply saying what unreasonable is given that you and your colleagues are Contending that there are no unreasonable practices certainly no unreasonable practices that are setting a pattern What would be the harm T to you of us doing that we’re just as setting forth? again guidelines interpret Interpretive rule or statement of policy if you will if you’re if you’re not unreasonable what would be the harm in saying it Depends on what it says Okay, but the problem is and this this is comes out very clearly when you look at the relief That is asked for by this petition, and we talked about this a minute ago They’re setting trait. They’re asking you to set triggers for when? Carriers and marine terminal operators are going to be told the Commission will determine that it is unreasonable if you do X Y & Z or if in this circumstance you charge detention or demurrage and those triggers are Extremely broad and the way this petition is written you had a colloquy yesterday about Gee would providing additional guidance make it easier for people to bring complaints to the Commission the answer is yes But not for the reasons that you were talking about yesterday if you were to adopt what’s before you You would be inviting people to come in and claim the carriers and MTO’s are being unreasonable even if a delay and a resulting charge Was caused by the United States government, okay, but what if we didn’t adopt exactly? What was before us, but What if we we ourselves as commissioners? Listening to both sides and allowing both sides to input comment word of define instances of unreasonableness again Not binding, not a legislative rule if you will but a statement of policy What would be the harm in that? Well again it would and I’m not trying to be cute it completely. I guess you know I sit completely And I don’t think you I don’t think you are trying to begin mr. Butler, but let’s say we go too far then you can take us to court well you can have that tossed out and you know a circuit court can say gee that you know the the Even with Chevron deference I feel that the the FMC Overstepped its bounds, and this is clearly not unreasonable in the cases brought forth by whatever carrier It is they were acting reasonably and therefore we throw it out I mean, you know you’ve got you’ve got recourse should we go too far with that well a couple of points? Commissioner Maffei first of all he does depend entirely on what you would do and presumably you would go through a rulemaking proceeding Because if you’re not going to adopt what’s here which I think Would be able to revise You go through a rulemaking proceeding you propose a rule We’d provide comments, and you see where it comes out and of course. That’s the obvious answer I Just think it is important if you were to consider going down that path that You do look really hard with your general counsel about the difference between guidance and interpretive rule and In a substantive rule because it’s not what you call it It’s what it does and I would just encourage you to think really long and hard about if you adopt something How is that actually gonna play out in the marketplace, and how is that actually gonna play out in a in a complete? proceeding You know I mean if it didn’t If it didn’t change anything then I don’t think the other side would would have a valid argument what their argument is is that it’s essentially a chicken well and I don’t know what their argument is but but from what I can see there is a chicken-and-egg problem Which is they’re asked to bring cases. There is a there are major? barriers financial and otherwise to bringing a case if there isn’t any there isn’t any precedent if you don’t bring cases so what we would be doing essentially is putting a bottom floor of kind of precedent to allow cases to be brought With a little bit more security in in circumstances that are egregious now You if you say, they are these are not such egregious issues or that you work things out most of the time It’s just calling their bluff. Then what you know again that I I do have a Well, I suppose yourself as you say we can go through that proper We certainly would go through that process by the way nobody is talking about not going through the usual rulemaking process And with our with our general counsel, and I think he would work very hard to make sure that we didn’t overstep those bounds I’m sure that’s the case Having been a private practice before my current job I can tell you that in litigation a lawyer will pull anything off the shelf to make their case and I just think it would be Naive to think that even if you call something Barely guidance if you get into a level of detail that’s actually gonna help anybody in Terms of knowing what they can and can’t do and that’s what we heard yesterday. That’s Supposedly the point of all this so that people have a better idea of what they can and can’t do if you get into that level of specificity you are going to get into a position where you reduce the amount of competition and Flexibility in this system, yeah That’s something you just have to learn I agree and I agree if I may finish that I frankly think the petitioners have done you as the Commission a real disservice They have filed a petition that can’t be granted in its current form and I think they would admit that if you really push them and Yesterday you had people backpedaling and saying well look it doesn’t have to be this just do something But after a day of questioning yesterday I didn’t hear anybody say, okay? Well, maybe this is an overreach. Maybe this is too broad But why don’t we do X? Why don’t we do y? There has not been in my view a credible solution put forward to you in Regulatory language for a guidance language that would avoid all these unintended Consequences and actually provide some guidance to the market. That’s not to say it’s impossible, but this is really hard And I just want everybody to understand what we undertake if we try to do this. Yeah, I mean look I Agree with some of that, but I do think that it’s it’s yes to me. Anyway. It’s fine to issue a petition Suggest potential solutions, but but the petitioning is valid even if there are our grievances and yes I certainly agreed that we do not want to limit flexibility or reduce competition except in the instance of unreasonable and unjust behavior And I’m fine with limiting flexibility to conduct unreasonable Of practices if that can be done, and I don’t disagree mr.. Butler that that would be very very challenging But but we are here for a reason one question in the one final question for for you, but also for the companies themselves What if we were to look more towards transparency we’ve been talking about yesterday, and you mentioned it a little bit today punitive versus compensatory charges What if we weren’t to say that it has to be one or the you know we’re not gonna limit anything But simply that you have to disclose What portion of the charge is punitive what portion of the charge is compensatory or other kinds of? transparency things like that is that something that you could deal with would that incur a lot of ancillary costs I’ll jump in at the front end and then let my colleagues speak to the mechanics of that But what you’re really talking about is asking people to publicly disclose a lot of their cost information and how their competitive Situations are defined. I think that there’s a huge problem with that I Would tend to agree with that I mean I think well we negotiate contracts With a shipper a Lot of times I had a situation last week Where shipper wanted to put the the value of a cargo? And then have a rate that was I think point zero zero zero one percent of that so of course I mean Exposing all this stuff and getting down to you know really minut costs I don’t think that’s fair for the carriers We don’t ask that for shippers when we negotiate rates if we did most of the export market today wouldn’t move And some of the points I was trying to make earlier about Keeping our network fluid getting the boxes back to Asia there can be huge costs here But it varies what and it’s gonna be an endless argument Do we say the cost is the cost is not being able to cover a next booking out of Yantian in three weeks? That’s going to be a huge number well You could have done this you could have done that I mean this this could just be in an endless Argument trying to justify the costs and getting you know what what should be applicable And what shouldn’t say I don’t see an easy way to to go about that Maybe an analogy if I go to buy a suit I’m not asking them how much they spent in you know for the tail or for the sewing and so on Look, I think I think that’s fair But I am gonna ask one one other question even though. I think mr.. Craig already introduced already addressed this but yesterday several of the testifiers talked about how they believed that this was a revenue stream a positive revenue stream for the carriers Can you just confirm that you do not believe that to be the case or is it the case? I would ask all three carriers and you mr. Butler in terms of the end is this a positive revenue stream is this do you make money off of this Because because I think what Mr. Magnani is it’s totally true if this is your main product Then nobody would be asked to say what your profit is on your main Your you know your main product compared to what your costs are But my understanding is this isn’t a you’re not making it this isn’t This is an additional fee, but is this a way is is this in fact a revenue stream for you And my view most most definitely, not I think I mentioned that on the demurrage were out of pocket to start with Per diem when you factor in all these costs that I’m alluding to and you did the arithmetic. I’m sure we’re not we’re not whole It’s a perfect world we would much rather I think Howard mentioned, or we’d rather see our boxes moving getting back timely if our choice was the current state of affairs Versus a seamless network for the boxes were moving and turning as they should be and there weren’t any demurrage detention charges at all much better world we would much prefer that Most of the time this is not a revenue generating charge for us MSC If you look at every box Micro they may be one instance where you can say oh, yeah that made a little money, but I see this thing It’s not a we certainly don’t view this as a profit Center we Use this as a cost control measure this falls under my Bailiwick because I’m head of the cost control people. This is something to control costs not to make money I Don’t have any figures on the industry as all I mean those are individual company numbers, and that’s that’s where they stay We may have some questions for you for the record and we’ll get those to you promptly thank you Thank you, it’s 12:20 If we can where I had a schedule but Let’s take an hour and 10 minute if we can be back at we’re actually scheduled to start at 2pm again But we can start earlier if you’d like I Was going to start at 1:30 Is was my point and people getting out early? I don’t think they’re good anybody complained raise your hand if you complain about getting out early ok The early folks have it, so we’ll reconvene at 1:30 Thank you very much

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