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October 1 2018

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October 1 2018 | The Journal of Commerce 31 www.joc.com Government In a July 20 letter to the bill's author, State Sen. Ricardo Lara, D-Commerce, the CTA explained why it was removing its opposition: "CTA previously opposed S.B. 1402 because of concerns the process and imple- mentation of the policy of creating a blacklist for certain operators could hurt good actors and cause a shift of cargo away from California's ports. However, the amendments taken in S.B. 1402 will ensure companies are able to use all their legal remedies to appeal decisions from the labor com- missioner and be properly notified before they are placed on any list." The key to protecting retailers and other BCOs is the list of trucking companies in violation of labor laws that the labor commissioner will pub- lish next year and update monthly, Broad said. "Checking the list is all they have to do," he said. The message here is that shippers shouldn't do business with trucking companies on the list, at least not until the drayage companies have paid the final judg- ments they are assessed, he added. Some BCOs expressed concern about their liability should drayage be booked for them by ocean carriers that have rates covering the ocean voyage and drayage move to the shipper's warehouse. Some BCOs also rely on freight forwarders, third-party logistics providers, or freight brokers to handle the drayage arrangements. Those ship - pers should instruct the middlemen to only book their freight after checking the list of violators. BCO contracts with freight middlemen also should contain clauses that indemnify them from liability if the third parties make such bookings, Broad said. Weston LaBar, CEO of the Harbor Trucking Association (HTA) in South- ern California, said the bill as written shouldn't be disruptive for his member companies because they follow the reg- ulations, and the HTA always encour- ages its members to seek legal counsel if they have any questions about their exposure to misclassification claims. LaBar said his main concern is that the bill, once signed, could be modified over time to become more restrictive. "The California Legisla- ture has a bad habit of adopting leg- islation and over time piling on other provisions that result in overregula- tion," he said. JOC email: bill.mongelluzzo@ihsmarkit.com twitter: @billmongelluzzo a different name, he said. "These are bad actors," he said. Initial industry concerns involved what constitutes a final judgment, and the possibility of BCOs being retroac- tively responsible for judgments ren- dered against truckers before the BCOs signed on as customers. Broad said final judgment is now clearly defined in the bill. He said it means "the judgment can no longer be appealed. It's over." Also, there will be no retroactive liability for BCOs. Shippers will only be jointly liable with truckers for violations that occur after Jan. 1, 2019. "This is not a gotcha bill. A lot of the opposition was removed by the end of the process." Guidance is advice, it's optional, whereas need suggests the possibility of a hands-on approach by the agency. In general, demurrage refers to not re- trieving a container from a terminal within an assigned window. Detention refers to not returning a container within a period of time. Demurrage ties up equipment and land on the terminal while detaining a container is a lost business opportunity for ocean carriers. Clarification of terms Shippers would applaud clarity and uniformity when demurrage and detention is charged and why. By establishing a defi- nition, shippers would better understand their responsibilities. Small shippers will no longer have to unscramble the complex rules of each ocean carrier. Ocean carriers and MTOs, however, argue establishing a uniform definition isn't as simple as it appears. What is a reasonable free time in Port Miami might be disrup- tive in Norfolk, Virginia; Los Angeles; or Bayonne, New Jersey. The needs of a shipper importing 1,000 TEU weekly might also be different from someone moving one TEU. A notable omission is any reference to "just and reasonable rules and practices" in the report. The phrase anchored the coali- tion's petition in December 2016. Perhaps the FMC will try to split the difference by establishing definitions, but not promulgate rules — as the shippers sought — on private transactions. Shippers believe rulemaking is very possible, explaining the exclusion as Dye focusing on fact finding in the draft report rather than pronouncements. Dye made a connection between tender- ing freight and the issue of detention and demurrage, a victory for the shippers. Ocean carriers argued their duty was delivery. In the case of merchant haulage, the duty ceas- es when the box is unloaded from the vessel and a free time window can start when this occurs, rather than when notice is provided to shippers of availability for pickup. But Dye seemed to side with the ship- pers on this issue. Port of Long Beach Shippers would applaud clarity and uniformity when demurrage and detention is charged and why.

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