News / New FMC rules on detention and demurrage come into force

© Mykhailo Polenok

The US Federal Maritime Commission (FMC) revision to detention and demurrage (D&D) rules came into force yesterday, introducing new requirements for billing, timeframes and how to dispute unfair charges. 

A key provision determines that D&D invoices can only be issued to either the consignee – defined as “the ultimate recipient of the cargo”– the person who contracted with the billing party provide to ocean transportation or storage of cargo, or the person for whose account this was provided. 

The FMC highlighted that “billing the proper party is an important part of the final rule”. 

Hapag-Lloyd said it “may forward or delegate a D&D invoice to a third party”, but added that only the defined parties could be listed as payers on any D&D invoice and “must remain responsible for payment”. 

The rules also require vessel-operating common carriers (VOCCs) and marine terminal operators (MTOs) to issue D&D invoices within 30 days from when charges were incurred, while NVOCCs must issue invoices within 30 days of themselves receiving an invoice . 

Billed parties have at least 30 days to make a fee mitigation, refund or waiver request. In such cases, the billing party must attempt to resolve the matter within 30 days, unless both parties agree to a longer timeframe. 

The FMC said the revision would “advance the commission’s goal of promoting 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”.

The new ruling also requires invoices to include “certain identifiable information” of the billing party to “ensure that billed parties understand the demurrage or detention invoices they receive”.  

If a billing party fails to include the required information on invoices, it eliminates any obligation of the billed party to pay the applicable charge. 

“The new rule will provide relief to parties that should never have received a bill for detention or demurrage,” explained the FMC.