The Federal Maritime Commission has voted to move forward with two demurrage-and-detention related initiatives proposed by Commissioner Rebecca F. Dye as part of Fact Finding 29. Unlike Commissioner Dye’s other Interim Recommendations, these initiatives required formal Commission approval.
The first initiative is to issue a policy statement on issues that affect the ability of shippers, truckers, and others to obtain reparations for conduct that violates the Shipping Act, including conduct related to demurrage and detention. The policy statement will provide guidance on the scope of the prohibition against carrier retaliation, when attorney fees may be imposed on a non-prevailing party, and who may file a complaint with the Commission alleging unreasonable conduct.
Additionally, the Commission in due course will issue an Advance Notice of Proposed Rulemaking (ANPRM) that will solicit public comments on two questions: first, whether the Commission should require ocean common carriers and marine terminal operators (MTOs) to include certain minimum information on or with demurrage and detention billings; and second, whether the Commission should require carriers and marine terminal operators to adhere to certain practices regarding the timing of demurrage and detention billings.
The Commission has also moved forward with other recommendations from FF29, including hiring additional staff for CADRS, including one person who will be designated as the agency’s exporter advocate. The Commission will make announcements related to other recommendations as developments warrant.
Commissioner Carl W. Bentzel says he believes that "the Commission needs to provide clear and firm guidance on the assessment of demurrage and detention penalties in light of current levels of congestion, and growing shipping frustration. Additional clarity will also assist FMC enforcement of potential violations of the Shipping Act."
"I look forward to working with FMC staff, my fellow Commissioners, and considering comments submitted through the public review process. Demurrage and detention charges when properly utilized are intended to work to incent the movement of cargo by limiting the amount of time available for the pick-up of cargo, and the retrieval of cargo equipment in order to maintain traffic fluidity. Carriers and marine terminal operators should not be charging demurrage or detention caused as a result of their own operational challenges, but on the other hand, shippers also need to pick up cargo left on-dock on a timely basis. While this clearly a delicate balance, I believe that we should move forward to consider new standards for the imposition of demurrage and detention."