New Ruling on Detention & Demurrage Charges

2024-03-04T16:33:38-05:00February 26th, 2024|

A ruling was issued last week by the Federal Maritime Commission (FMC) that establishes new billing requirements for common carriers and marine terminal operators (MTOs). These requirements – which cover charges incurred for demurrage and detention charges – ultimately provide a clearer picture on who may be billed, the timeframe of billing, and the process for potential billing disputes. It is scheduled to take effect on May 26, 2024.

In short, demurrage/detention charges can only be issued to either of the following parties, and may not be issued to multiple parties simultaneously:

1.) “The person for whose account the billing party provide ocean transportation or storage of cargo and who contracted with the billing party for the ocean transportation or storage of cargo.”

2.) The Consignee, otherwise known as the ultimate recipient of the cargo

In regards to disputes, the billed party has at minimum 30 calendar days to make fee mitigation, refund, or waiver requests. Should they make this timeframe, the billing party is then responsible for resolving the matter within another 30 calendar days unless agreed otherwise.

In enacting this agreement, the FMC is hoping to promote supply chain fluidity and cohesion. Billed parties will be able to understand the demurrage/detention invoices received by requiring certain identifiable information be included on the invoice in question. Failure to do so will result in the billed party being absolved of responsibility to pay the invoice.

To read the ruling in full, please click here.


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