U.S. Federal Maritime Commission (FMC) Issues Detention and Demurrage Billing Requirements

February 26, 2024

Late last week, the Federal Maritime Commission (FMC) released its final rule for detention and demurrage billing requirements. This rulemaking is one of the more significant regulatory actions to come out of the Ocean Shipping Reform Act (OSRA).

Pending final (and expected) Office of Management and Budget (OMB) approval, required elements for all detention and demurrage (D&D) invoices will include:

  • The invoice date and due date
  • Allowable "free time" (in days)
  • The start and end date of allowable free time
  • For charges assessed on imports, the container availability date
  • For charges assessed on exports, the earliest container/equipment return date
  • Dates for which detention and or demurrage charges were issued
  • Basis for why the billed party is the proper party of interest and liable for the charge

Beginning May 28th, the rule also requires vessel-operating-common carriers (VOCCs) and Marine Terminal Operators (MTOs) to issue (D&D) invoices within 30 calendar days from when charges were last incurred. Non-vessel-operating common carriers (NVOCCs) must issue demurrage and detention invoices within 30 calendar days from the issuance date of the invoice they received. IAM's comments on the proposed rule in 2022 were supportive of this 30 day requirement, due to instances of invoices often being sent several months after D&D charges were incurred.

According to the FMC summary, a key provision of this rule determines that demurrage or detention invoices can only be issued to either:

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


The “consignee,” who is defined as “the ultimate recipient of the cargo; the person to whom final delivery of the cargo is to be made”. Of note, D&D bills cannot be issued to multiple parties simultaneously.

IAM's earlier comments spoke to the appropriateness of assigning D&D charges to the consignee, especially in the case of household good shipments where not for resale items are being delivered to a private residence, in contrast to the traditional commercial marketplace. While the final rule does permit the consignee to be billed for appropriate documented D&D charges, the rule also recognizes IAM's and other industry input.

Specifically, the rule points out that those issuing charges should review a consignee’s "contractual privity" with the shipper, to determine the appropriateness of billing the consignee. Merely listing the consignee on the bill of lading is not sufficient to support billing the consignee in and of itself. The Commission also encourages, but does not require, written agreements between the shipping entities and consignees regarding responsibility for potential D&D charges.

Finally, while the Commission declined to include specific, stop-clocking events as part of this rule (for purposes of detention and demurrage), they do point back to the statutory requirements of the OSRA, which highlights in code their final interpretive rule on detention and demurrage, stating that delays and circumstances surrounding government inspections of cargo be given consideration.

We anticipate future FAQs and supporting information on the rule to be posted on the FMC's OSRA microsite. For more information, please contact Bryan Vickers (703-403-2882, bvickers@pacellp.com) with IAM's Government and Regulatory Affairs Team.