New FMC Investigation on Demurrage and Detention Practices

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New FMC Investigation on Demurrage and Detention Practices

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04-Dec-20

New FMC Investigation on Demurrage and Detention Practices

Earlier this year, The United States Federal Maritime Commission (FMC) opened the Fact Finding Investigation No. 29 (FF 29) in response to the disruptive effects COVID-19 has had on trade and for the purpose of identifying solutions for some of the issues. That investigation was quickly followed by the FMC's release of the long-awaited decision in Fact Finding No 28, Interpretative Rule on Demurrage and Detention Practices under the Shipping Act, FMC Docket No 19-05 (April 28, 2020). In that decision, the FMC provided guidance on when the assessment of demurrage and detention would not be reasonable, acceptable or even lawful.

It appears that this voluntary effort has not worked very well and the congestion at major ports has made it far worse. Yet the assessment of demurrage and detention has continued unabated, particularly in LA/Long Beach and NY/NJ ports.

Charges have been assessed even though the slow down on the movement of containers in and out of the ports is beyond the control of NVOCCs and shippers. It appears, however, that the FMC maybe letting the carriers and ports know that the status quo is no longer acceptable.

In response to the continued deluge of complaints reaching the FMC, the Commission, on November 19, 2020, issued a supplemental order expanding the scope of FF 29. The new order states that VOCCs calling on the ports of Los Angeles/Long Beach (LA/LB) or New York/New Jersey (NY/NJ) may be engaging in unreasonable practices. There may never be a better time to try to correct the unjustified demurrage/detention practices of the carriers and MTOs.

Some of you have experienced unreasonable demurrage, detention or chassis charges. The more input the FMC receives from the shipping public the better our chances of achieving some meaningful relief. Comments can be submitted confidentially in a way that only the Commission would have access to details that could serve to identify parties. Your comments or complaints should be sent, with detailed information, to the FMC through the special mailbox that Commissioner Dye established at ff29@fmc.gov.

Please contact us at info@jsconnor.com if you have questions or want additional information.