U.S. Federal Maritime Commission (FMC) Update

June 03, 2024

As IAM highlighted last month, the Final Rule for Demurrage and Detention billing invoice requirements went into effect on May 28th.

Final D&D invoice requirements now 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
  • TFor 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

Leading up to this action, the FMC also clarified that if certain circumstances are met under OSRA, ocean carriers may invoice motor carriers for detention and demurrage charges. The Commissioners acknowledged earlier confusion from wording in the final OSRA rule.

Leading up to this action, the FMC also clarified that if certain circumstances are met under OSRA, ocean carriers may invoice motor carriers for detention and demurrage charges. The Commissioners acknowledged earlier confusion from wording in the final OSRA rule.

As the Commission noted in their release, billing the proper party is an important part of the final rule, and parties receiving non-compliant invoices have options for recourse. In addition to seeking resolution directly with the carrier, they may also file a charge complaint through the FMC portal, or request informal assistance from the Commission’s Office of Consumer Affairs and Dispute Resolution Services. Complete information, including FMC-hosted webinars on detention and demurrage invoice are available by clicking here.

Detention & Demurrage (D&D) Dispute Resolution Policy

It's also important to note that VOCCs, NVOCCs and all billing parties should have a D&D Dispute Resolution Policy in order to comply with the Final Rule, Billing and billed parties can be the same company, if unchallenged charges are passed onto, or assessed against their client, which can be the importer or exporter. Dispute Resolution Policies should either be on the company website, as part of a publicly available tariff rule, or as a standardized language in D&D invoices to clients, so they are familiar with how to challenge an invoice if they do not agree with the charges.

Companies seeking to challenge D&D invoices should be prepared to provide invoice, container and bill of lading numbers, reasons for the dispute, (for example, incorrect free time, incorrect rate, incorrect date(s) or other operational issues), along with all supporting documentation. As IAM has highlighted, the 30 day window applies in both directions (both billing and billed parties) - billing parties have 30 calendar days (from the last days of charges being incurred) to issue D&D invoices, and those parties billed wishing to challenge have a 30 days from invoice receipt to do so.

IAM Opposes Petition to Delay Final D&D Invoice Rule Requirements

Earlier this week, IAM joined 62 other trade associations, in a comment letter to the FMC opposing additional time, as requested by the Ocean Carrier Equipment Management Association (OCEMA), to extend the effective date of the Detention and Demurrage Billing Requirements Final Rule.

The letter simply states:

  • Our groups strongly supported OSRA, which included the Detention and Demurrage Billing Requirements Rule as a key element
  • Our long support to bring clarity and transparency to detention and demurrage billing practices
  • The Rule is already in effect, and any kind of delay would cause significant challenges and potential chaos in the marketplace
  • Earlier clarifications issued by the Commission did not change the underlying Final Rule itself

In related port news, last week IAM joined 158 trade associations in a letter to the White House, urging their intervention to restart labor negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX). This labor contract, which covers all maritime ports along the East and Gulf coasts, is set to expire on September 30, 2024. Labor talks stalled last month, when both parties announced scheduled labor talks had been cancelled. Media coverage of the letter can be found here.

For additional information or if you have any questions, please contact Bryan Vickers (703-403-2882, bvickers@pacellp.com) with IAM's Government and Regulatory Affairs Team.