- The Federal Maritime Commission voted on Wednesday to move forward with two initiatives related to detention and demurrage, according to a press release.
- The first initiative aims to provide guidance on complaint proceedings and protection against retaliation by ocean carriers. The second initiative will issue an Advance Notice of Proposed Rulemaking to seek public comment on how ocean carriers should divulge information and practices on detention and demurrage.
- This is the latest action from the FMC to address issues in the ocean shipping industry, as the pandemic brought forward a series of complaints. The initiatives are part of Fact Finding 29, which was established in March 2020 to identify solutions to COVID-19 related challenges.
Detention and demurrage have been a major sticking point for drayage stakeholders. The average charge per container is $200 or more for 80% of the respondents to a survey by the Harbor Trucking Association and TradeLanes.
It's "as bad as its ever been in my experience," Michael Mecca, founder and CEO of PortPro, said of detention and demurrage.
But the fees are one of many costs companies are dealing with related to ongoing congestion at ports.
"Some stakeholders complained that increasingly demurrage and detention charges are not administered in a manner that incentivizes freight fluidity," FMC Commissioner Rebecca Dye said in an executive summary of Fact Finding 29, which was provided to lawmakers in June. As a result, the practices warranted "additional scrutiny, especially given the rapid rise of trade volumes."
The vote on Wednesday to provide guidelines and seek public comment is the latest step the FMC has taken to provide oversight over detention and demurrage practices.
The FMC looks into detention and demurrage charges
April 29, 2020
February 11, 2021
February 18, 2021
June 16, 2021
July 21, 2021
August 5, 2021
"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," Commissioner Carl W. Bentzel said in a statement.