News / WSC asks US court to order FMC to correct 'inconsistent' new D&D rules

© Amnaj Khetsamtip

Changes to the Federal Maritime Commission’s (FMC) rules surrounding detention and demurrage charges and truckers working on carriers’ behalf have come under fire from the World Shipping Council (WSC).

Filing a petition yesterday with the US Court of Appeals, the WSC claimed rule changes due at the end of May include an “internal contradiction” that could still leave truckers and intermediaries liable for D&D charges.

Outgoing WSC president John Butler said: “Congress directed the FMC to further clarify its interpretive rule for billing detention and demurrage. But the final rule contains a significant internal contradiction regarding the billing of motor carriers for D&D. That inconsistency is already creating substantial confusion and uncertainty for ocean carriers and other industry participants.”

Coming as part of the bi-partisan 2022 Ocean Shipping Reform Act (OSRA), the rule change was intended to limit D&D billing to contracted parties.

This would have lifted a burden that, predominantly, truckers had been facing where, despite not knowing the terms of a contract between cargo owners and carriers, they were held responsible for resolving shortfalls between contracted terms and the final invoice.

The intended changes received industry-wide support, particularly given that the only alternative would be to disclose contract terms to those outside the contractual relationship.

Mr Butler noted that, while the language of the FMC rule change appeared to prohibit further billing of this kind, he said the “preamble to the rule clearly states that an ocean carrier may invoice a motor carrier with which it holds a contract”.

He added that despite having asked the FMC to address this technical issue, it had yet to do so, hence WCS turning to the court to “correct this inconsistency in order to ensure regulatory clarity”.

Since OSRA, the FMC has found itself contending with a number of cases concerning what carrier customers and contracted parties have described as “unfair” practices by shipping lines.

And there have been some large sums involved: Hamburg Süd was forced to pay furniture shipper OJ Commerce $9.8m; with Bed, Bath & Beyond going after OOCL with a $38m claim.

More recently, however, there has been a slew of claims brought against carriers, including Maersk and Zim, for as little as $1,300, with penalised parties seemingly willing to take the time to clawback monies they believe to have been wrongly charged.