News / FMC's new rules on D&D don't address 'the elephant in the room'

© Andrey Popov

US shippers and truckers’ years of the “constant game of runaround” with detention and demurrage (D&D) invoices will likely be abated by the FMC’s new rules – but “erroneous” carrier invoices have still not been addressed.  

Last week, the FMC revised its D&D rules, and introduced new requirements for billing, timeframes and how to dispute unfair charges.   

The FMC said the revision would “promote supply chain fluidity by ensuring a clear connection between the failure to pick up cargo or return equipment in a timely manner and the appropriate fee”.  

Head of ocean freight Americas at Rhenus Stephanie Loomis told The Loadstar: “Disputing a D&D invoice was frustrating and time-consuming, since carriers would often demand back-up information that they have or should have provided.  

“It was a constant game of runaround, often making the invoiced party feel that the ultimate goal was for the process to be so time-consuming that exhaustion would win out, and bills, whether right or wrong, would just be accepted.” 

Ian Weiland, COO at LA-based trucking company Junction Collaborative Transports, added: “In the past, these invoices pitted the trucker against the shipper, creating conflict…  

“No shipper wants to pay added charges invoices, but neither does the trucker.  If the shipper didn’t feel the charges were warranted, the shipper might not pay the trucker, who would be stuck holding the invoice.” 

But, Mr Weiland explained, with the new billing methods, if the shipper doesn’t feel the charges are warranted, it can now dispute the invoice with the carrier directly. 

Founder of D&D and maritime dispute company FourOneOne Sara Dandan told The Loadstar she viewed these changes as a positive step.  

“Specifically, the invoicing requirements, and especially the prohibition on billing truckers if they are not a responsible party,” she said 

“It’s a travesty that carriers were allowed for so long to foist demurrage and detention bills onto truckers, while threatening them with shut-outs; forcing them to pay bills that weren’t theirs in order to preserve their livelihoods.” 

Ms Dandan pointed out that the pandemic had spotlit the “decades of shippers and truckers being taken to the cleaners with little to no recourse”.  

She added: “I think what we saw during the pandemic really emphasised what so many knew to be true about the unfairness of it all.”  

And Ms Loomis told The Loadstar: “The pandemic prompted these changes. As the terminals became jammed with cargo, in many cases bringing operations almost to a standstill, importers and dray operators were unable, not unwilling, to pick up containers before the allotted free time expired. 

“It was not the fault of most individual importers or shippers that containers were stuck, but it was exactly those customers that paid the price.” 

Ms Loomis said that during this period, carriers made more than $2bn in D&D charges alone, with some individual importers paying fees in excess of $1m.  

However, while the new FMC regulations have in general been welcomed, Mr Weiland said: “If the dispute is denied, in many cases the shipper can still, essentially, ‘short’ the trucker invoice, forcing the trucker to then eat the detention charge.” 

He added: “And the elephant in the room, erroneous carrier invoices, has still not been resolved. I don’t know if it ever will change, where we all have to arm ourselves for container battle a little differently than we have in years past.” 

And while Ms Dandan agreed the changes were largely positive, she said: “I don’t think we can tell if issues have been addressed until we see them applied in the real world.  

“There’s often a disconnect between intention, what’s written and what’s done.”