The Federal Maritime Commission (FMC) hopes an “interpretive” rule will help the ocean shipping industry reduce bottlenecks and eliminate disputes over demurrage and detention charges.
This proposal can “promote fluidity in the U.S. freight delivery system by ensuring that demurrage and detention serve their purpose of incentivizing cargo and equipment velocity,” the agency said in a notice of proposed rulemaking. “The proposed interpretive rule will also mitigate confusion, reduce and streamline disputes, and enhance competition and innovation in business operations and policies.”
Speaking last week in California at the Intermodal Expo, hosted by the Intermodal Association of North America (IANA), FMC Commissioner Rebecca Dye confirmed the proposal will not mandate legally binding duties. However, it will help structure relationships and transactions by offering clearer guidance surrounding demurrage and detention charges, she said.
FMC Commissioner Rebecca Dye speaks at Intermodal Expo in Long Beach, CA.
Demurrage refers to the time an import container sits in a terminal, with carriers generally responsible for collecting fee for the terminals. Detention refers to shippers holding containers for extended periods outside terminals.
Dye said these charges are useful when they incentivize parties to move freight promptly from ports and marine terminals. However, if a trucker cannot retrieve cargo from a terminal because of unexpected closures, cargo inspections or severe weather, then fees should likely not apply.
Likewise, the FMC said the same level of responsibility should apply to the timely return of empty containers at marine terminals.
For a number of years, shippers and truckers has asked FMC to look into what they view at unfair and excessive demurrage and detention fees. Dye said she spent much of the past 18 months interviewing industry stakeholders across the country to refine recommendations and advise on how to create dispute resolution policies that address the concerns of all sides.
The proposal also calls for the establishment of a Shipper Advisory Board to get advice from U.S. importers and exporters, and to continue support for the Supply Chain Innovation Team working to address chassis availability issues.
FMC is accepting comments on the proposal until Oct. 17, though it has already been asked to extend that deadline to the end of the month. Dye said she does not expect FMC to consider a more formal legislative rule.
