In a move aimed at fostering fairness and transparency within the shipping industry, the Federal Maritime Commission (FMC) has enacted new regulations tightening the rules around container late fees, specifically demurrage and detention charges. This pivotal change, effective from May 26, 2024, is seen as a significant stride towards mitigating the longstanding issue of fee abuse, offering a beacon of relief for shippers worldwide.
The Crux of Change
At the heart of these regulations is the mandate for ocean carriers and terminal operators to issue detention and demurrage invoices within a strict 30-day window following the accrual of charges.
The rule outlines specific minimum data requirements for detention and demurrage invoices, including:
- The invoice date and due date
- The allowed free time in days
- The start and end date of the free time
- For imports, the container availability date
- For exports, the earliest return date
- The specific date(s) for which demurrage and/or detention charges were incurred
Failure to include any of these essential details nullifies the obligation of the billed party to pay the specified charge. This structured approach ensures a higher level of clarity and accountability in the billing process, empowering shippers with the information needed to dispute unjust fees effectively.
Impact on the Shipping Community
The shipping community has mostly welcomed the FMC’s new rules, viewing them as a significant step towards rectifying long-standing grievances. The Agriculture Transportation Coalition (AgTC) has lauded the move as a crucial step towards reforming what it views as abusive detention and demurrage practices. Similarly, the American Trucking Associations’ Intermodal Motor Carriers Conference (IMCC) has expressed approval, highlighting that motor carriers, particularly port drayage truckers who often bear the brunt of these fees, will benefit from the clarification that they are no longer liable for demurrage and detention bills if they do not contract directly with ocean carriers.
In essence, these regulations represent a significant leap towards a more equitable and efficient maritime freight ecosystem, ensuring that the charges levied are transparent, justified, and ultimately, fair.