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FMC Recommendations on Demurrage

In response to a petition filed by the Coalition for Fair Port Practice, the Federal Maritime Commission adopted a set of recommendations made by Commissioner Rebecca Dye to address detention and demurrage charge issues she uncovered during her 18 months fact finding investigation.

In their petition to the FMC the Coalition was especially concerned about the assessment of demurrage and detention charges by terminals and ocean carriers when delays of picking up containers are beyond the shipper’s control. 

The Federal Maritime Commission’s proposed interpretative  rule  would clarify under what circumstances it would consider ocean carriers’ and marine terminals’ detention and demurrage rules and practices to  be  likely unreasonable

  • when cargo is not available for pickup during free time
  • when pickup appointments are unavailable within a reasonable time frame
  • when cargo interests/owners are not provided adequate notice that the cargo is available for pickup, and free time does not start until notice of availability has been provided.
  • when pickup appointments are not guaranteed to be available within a certain period after providing notice of container  availability.
  • when dispute resolution procedures are not clarifying  points of contact, time limits for filing claims,  and types of evidence that will be considered.
  • when carriers and marine terminal operators do not provide enough billing information and evidentiary guidance to enable cargo owners  to contest potential improper demurrage and detention charges.

(the above are excerpts/summaries of a Transportation Update prepared for members of the Coalition for Fair Port Practices by Karyn A. Booth, Esq.  (202) 263.4108 of Thompson Hine LLP)

Marine terminal operators and carriers reportedly have countered their customers’ demands for fair  demurrage and detention rules  as summarized  above by suggesting their existing rules are indeed encouraging better cargo flow, and that too much rigidity (?) will only further complicate commercial disputes.

The FMC has been seeking comments on their  proposed rule by Oct. 17th  and it will take some time after that before they will announce their final rule.