FMC proposes new demurrage and detention requirements

The Federal Maritime Commission (FMC) is proposing a new rule designed to bring more clarity, structure, and punctuality to demurrance and retention billing practices for ship operated common carriers (VOCCs), non-ship operated common carriers (NVOCCs), and Marine Terminal Operators (MTOs).

This Notice of Proposed Rulemaking (NPRM) responds to the requirements of the Marine Transportation Reform Act of 2022 (OSRA) and continues the work begun by the Commission in 2018 when it ordered an investigation led by Commissioner Rebecca F. Dye (Fact Finding 28), Investigate VOCCS and mto conditions and practices related to demurrage, retention, and daily charges.

This fact led the commission to issue a final rule in May 2020 addressing how the demurrance and retention practices of VOCCs and mto are interpreted as justifiable, the FMC said in a statement. If the rules are through, insist on VOCCs, nvocc and shipping carriers are only issued by the parties to the contract with the demurrage or demurrage documents, in order to make clear the property of expenses, and the cost to stop accumulating within 30 days after issue the invoice, and provide 30 days the cost of controversy, and provide clear information about the controversial way.

Specifically, the FMC proposed four actions in the New Strategy Strategy Paper:

1.Adopt the minimum list of information that a common carrier must include in the demurrage or demurrage invoice specified in OSRA and 46 U.S.C. 41104(d)(2).

2.Add to the list immediately following the above additional information that must be included in or with the demurrage or demurrage invoice.

3.Further define prohibited practices and clarify which parties may be required to pay demurrage or detention fees.

4.Establish the invoicing practices that the invoicing party must follow when invoicing demurrage or detention charges.

The Commission recommends that correctly issued invoices be issued only to persons who have entered into a contract with the billing party for the transport of goods or space to store them, while the billing party is responsible for the payment of any demurrage or detention charges arising therefrom. FMC would like to receive comments on whether it is appropriate to list the consignee on the bill of lading as another party who may receive a demurrance or holdup invoice. Once the NPRM is published in the Federal Register, interested parties will have 60 days to submit comments to the Commission.

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