FMC Orders Carriers to Disclose Demurrage Practices

On Monday, the U.S. Federal Maritime Commission (FMC) announced that it has begun its investigation into terminal operators' and ocean carriers' practices for port demurrage, detention and free time. In its first move, FMC is ordering carriers and terminals to disclose information and documents explaining these practices. FMC said that carriers have been asked for detailed background on their policies, especially regarding circumstances where shippers are not able to retrieve cargo.

"The ultimate resolution of this investigation will have the potential to affect every ocean common carrier calling the United States. It is vital that the information we gather is representative of business and operational practices, as well as market conditions, nationally," said FMC Commissioner Rebecca Dye, who is spearheading the fact-finding effort. 

Commissioner Dye called for shippers, drayage companies and other affected parties who have experienced unreasonable port detention, demurrage and fee practices to provide specific allegations and supporting materials. "We expect concerned parties to participate robustly in this investigation. Their cooperation is essential," she said. 

Commissioner Dye's team announced the new investigation early last month. The effort will examine whether the alignment of commercial, contractual and cargo interests helps cargo move smoothly; the billing practices for invoicing demurrage and detention; fee policies for delays caused external events; and the policies for dispute resolution when the BCO/forwarder and the carrier disagree on these fees. 

In a bulletin for members, the Florida Customs Brokers and Forwarders Association (FCBF) said that it has joined with other shippers and agents to petition the FMC for action on demurrage and detention fees. The FCBF said that the complaint is particularly targeted at situations where NVOCCs and BCOs are not able to pick up or deliver their cargoes to the terminal due to situations that are beyond their control - for example, port congestion due to severe weather or labor action.