The FMC’s Increasing Role in Detention and Demurrage Issues

Jun 13, 2024Blog, Imports and Exports, International Logistics, Rail, Supply Chain Management

The Federal Maritime Commission (FMC) has recently taken significant steps to address long-standing issues surrounding detention and demurrage billing practices. These measures aim to enhance transparency, fairness, and accountability in maritime logistics, making the FMC an essential advocate for businesses dealing with improper billing practices.


 Regulatory Background: In February 2024, the FMC issued its final rule on detention and demurrage billing practices, which took full effect on May 28, 2024. This rule responds to the Ocean Shipping Reform Act of 2022 (OSRA 2022) and focuses on promoting supply chain fluidity by clarifying billing procedures and requirements​.

Key Provisions: The rule sets out who can be billed for detention and demurrage charges, the timeframe within which invoices must be issued, and the necessary information that invoices must contain. Importantly, it prohibits issuing invoices to multiple parties, reducing confusion and double-billing issues​.

Specific Interventions

Billing Clarity and Timeframes: According to the new regulations, invoices must be issued within 30 days of the last incurred charges. Non-vessel-operating common carriers (NVOCCs) have an additional 30 days from the date they receive the original invoice to issue invoices. If the billing parties fail to issue invoices within these timeframes, the billed parties are not obligated to pay.

Mandatory Invoice Content: Invoices must include specific data elements to ensure transparency. These elements include details on the relevant containers, the charges applied, the calculation methods, and instructions for disputing the charges or requesting waivers. Failure to include this information means the billed party is not required to pay​.

FMC as an Advocate

Dispute Resolution: The FMC provides several avenues for resolving disputes over non-compliant invoices. Businesses can seek direct resolution with the carrier, request informal assistance from the FMC’s Office of Consumer Affairs and Dispute Resolution Services, or file an action before the FMC’s Administrative Law Judges​.

Enforcement: The FMC’s enforcement mechanisms ensure that carriers and marine terminal operators adhere to the new billing practices. Non-compliance can result in enforcement actions, offering businesses a reliable advocate in cases where carriers act improperly​.

Implications for Businesses

Increased Accountability: The FMC’s new rules hold carriers and terminal operators accountable for their billing practices, reducing the likelihood of unfair charges and improving overall supply chain efficiency​.

Proactive Compliance: Businesses are encouraged to review and adjust their billing processes to comply with the new regulations. This proactive approach will help prevent potential disputes and ensure smooth operations under the new regulatory framework​.

The FMC’s intervention in detention and demurrage issues marks a significant shift towards greater fairness and clarity in maritime logistics. For businesses, this means a more predictable and transparent billing environment, with the FMC serving as an advocate against improper billing practices.

At TOC Logistics, we continually monitor compliance requirements and market trends that could potentially impact your global logistics. We are available to serve as your partner, keeping you informed and walking you through each aspect of your supply chain. Contact TOC Logistics today and learn more.


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