The investigation into port demurrage, detention, and free time practices by ordering ocean common carriers was firstly launched in 2018.
This commission provides guidance, in line with the Shipping Act, on what would be considered as acceptable and feasible practices for ocean liners and marine terminals in order to assess demurrage and detention fees on marine operators under the Shipping Act.
In the following weeks, the Commission will issue a Notice of Proposed Rulemaking outlining in specific detail the Interpretive Rule on Demurrage and Detention and inviting public comment.
Marine operators have been complaining the past five years, stating that they had to face penalties for relevant events that were mostly beyond their control, such as sudden maritime terminal congestion; unscheduled terminal closure; severe weather or a government inspection.
The FMC noted that the rule
in assessing the reasonableness of demurrage and detention practices and regulations, it will consider the extent to which demurrage and detention are serving their intended purposes as financial incentives to promote freight fluidity.
It was also added that as imposed, demurrage and detention fees will "incentivize cargo movement and the productive use of assets"; Given that cargo availability is of a great importance for the needed function of demurrage serving, demurrage is practiced to be tailored to cargo availability so that it is reasonable.
The evaluation of the fees is connected to the timely return of empty containers at marine terminals, shedding a light on how carriers and marine terminal notice shippers that the cargo is available for retrieval.
Concluding, the implementation of demurrage and detention fees during government audits is "a significant problem for cargo interests and truckers”.
