News / Ocean carriers not hitting US truckers with D&D charges again – for now

© Mykhailo Polenok

US truckers have been left wondering whether shipping lines and terminals will resume billing them for detention and demurrage (D&D), and the Federal Maritime Commission (FMC) has hinted it may address the issue again in a future ruling.

A pilot project by the Federal Motor Carriers Safety Administration (FMCSA) to extend service hours, touted as a possible solution to the detention issue, has been slammed by a highway safety group as “dangerous and misguided”.

It has been nearly two months since a US appeals court restored the right of ocean carriers to levy D&D charges on trucking firms, but so far there have been no reports of any receiving such bills.

In a seeming end to a long running dispute, the FMC ruled last year that ocean carriers could only bill parties that had contracted directly with them (shippers), or consignees listed on the bill of lading. This exempted truckers and logistics providers from such charges, but the World Shipping Council (WSC) challenged this and got the rule overturned by a US appeals court on 23 September.

The court concluded that the FMC had overstepped its mandate with a ruling that was “arbitrary and capricious”.

According to one commentator, the FMC, with its comparatively small budget for legal disputes, was outgunned by WSC lawyers.

Donna Lemm, chief commercial officer of drayage firm IMC Logistics, said  the court ruling “does have us wondering what is next”.

IMC, which has a presence at every major port and rail hub across the US, has not received any D&D bills since the court verdict, Ms Lemm confirmed.

“So much has been done to bill the contracted party (shipper/consignee) directly under contract that we are not sure if ocean carriers will revert back.  So far, there have been some threats of billing motor carriers, but none have actually been pursued,” she said.

And Paul Brasiher, global supply chain VP of ITS Logistics, added: “We have not, nor am I aware of other truckers getting per diem or container detention invoices, and have not seen notifications from the ocean carriers. Demuarrage has to be paid by any party prior to the container being released by the terminal and is not billed.”

Maersk, for one, seems to be focusing on cargo owners with a service to curtail D&D charges. It recently reached out to customers, touting its ‘freetime extension’ as a way they could avoid D&D bills, or at least save over 20% of such charges. It also announced a webinar to walk clients through the steps of purchasing freetime online and how to use the tool.

The FMCSA is not concerned with D&D charges, but its latest initiative touches on wait times for truckers at ports, which stretched beyond terminal opening hours during the surge in volume after the pandemic. The agency plans a pilot programme to extend truckers’ work hours from the mandated 14-hour limit to 17 hours by taking breaks of no less than 30 minutes and no more than three hours.

While its primary objective is to examine whether such flexibility could achieve the same level of road safety as the 14-hour limit, the FMCSA raised, as a secondary goal, the mitigation of the “impacts of unreasonable detention times, thereby improving the working conditions of America’s truck drivers”.

The scheme has been blasted by the Advocates for Highway and Auto Safety group in comments filed in response to the proposal, including: “The agency should be examining problems with detention time instead of proposing this dangerous and misguided initiative.”

The decline in US imports may have stifled impulses on the ocean carrier side to hit truckers with D&D charges again for the time being, but the window may be narrow – down the road, the FMC may have another go at shielding truckers from such bills.

On its website last week it noted that “the court’s decision does not preclude the commission from addressing who may be invoiced for demurrage and detention in a future rule-making”.  It added: “Instead, the court noted that the FMC might elect to maintain the same policy concerning who may be invoiced, so long as it provides a fuller explanation of its reasons supporting that policy. These matters may be addressed in a future rulemaking.”