The Intermodal Motor Carriers Conference (IMCC) of the American Trucking Association (ATA) has expressed approval for a new rule by the Federal Maritime Commission (FMC). This rule provides clarification on how shippers are billed for detention and demurrage charges. Both the IMCC and ATA had previously urged Congress to provide this clarification during the passage of the Ocean Shipping Reform Act in 2022.
"The Ocean Shipping Reform Act required the FMC to clarify who can be billed for detention and demurrage charges, and we are extremely pleased to see that motor carriers who do not contract with ocean carriers will no longer receive these bills," said Jonathan Eisen, IMCC Executive Director.
A press release from the FMC published a final rule on February 23, 2024. The new requirements establish how common carriers and marine terminal operators (MTOs) must bill for demurrage and detention charges. It clarifies who can be billed, the billing timeframe, and the bill dispute process. Most of this new rule will come into effect on May 26, 2024.
According to this FMC press release, under the new rule, only those who contract with the billing party for ocean transportation or storage of cargo or are considered as "consignee", defined as "the ultimate recipient of the cargo", can be issued invoices for demurrage or detention. The rule also stipulates that vessel-operating-common carriers and MTOs must issue these invoices within 30 days of when the last charges were incurred. Non-vessel-operating common carriers must issue these invoices within 30 days of receiving their own invoice. The party being billed is given at least 30 days to request fee mitigation, refund or waiver requests.
In an ATA press release, it was mentioned that when shipping containers are delayed on docks or after they have been removed from port complexes, motor carriers often receive bills with detention and demurrage charges from ocean carriers. This happens even when the trucking companies are not part of the contracts. During the pandemic, these charges increased shippers' costs and consequently, consumer prices.
Eisen stated that "the new rule will require ocean carriers to work directly with their customers, increasing incentives for faster dispute resolutions and bringing greater efficiency to the supply chain."
