The U.S. Federal Maritime Commission (FMC) introduced a new regulation this year to enhance transparency and clarity in the maritime sector's billing practices of demurrage and detention charges. Effective May 28, 2024, this measure is part of the Ocean Shipping Reform Act 2022 and seeks to clarify charges associated with container storage at seaport terminals and the costs of container downtime. Starting May 29, 2024, U.S. ocean carriers and terminal operators will be required to include specific minimum details on their demurrage and detentionThis ensures transparency and helps stakeholders understand the charges and who is billing them. The required details include: (a) The date the container became available; (b) The port of discharge; (c) The container number(s); (d) Start and end dates of freetime; (e) Applicable demurrage or detention rules; (f) Daily applicable rate(s); (g) Total amount due; (h) Contact information for questions or fee mitigation requests.
Additionally, ocean carriers must issue a statement certifying compliance with FMC rules and ensure their actions did not contribute to the charges incurred.
The regulation also clarifies which parties can be held responsible for demurrage or detention charges and establishes clear timelines for invoicing, filing claims, and resolving disputes. This includes stipulations for consignees to bear these charges and sets timeframes for non-vessel-operating common carriers (NVOCCs) to bill their customers.
The new rule benefits the entire supply chain by providing clarity and fairness in the collection of demurrage and detentionWhile the regulation applies solely to the U.S., it has already influenced some shipping lines to adopt new policies in this market. On July 18, 2024, Maersk announced updates to its demurrage and detention fees in the U.S., effective August 8. Similarly, CMA CGM published an update on its official website on July 10, 2024, in compliance with the new rule, with other carriers expected to follow suit.
From 2020 to 2022, the nine largest carriers operating on U.S. trade routes collected approximately $8.9 billion in demurrage and detentioncharges. This situation prompted the FMC to recognize the need for investigation and regulation, ensuring shippers and consignees better understand these fees. Previously, in 2015, following complaints from shippers, freight forwarders, and logistics operators about reduced"Free Time"and increased costs, the FMC released its first report highlighting inconsistencies and lack of transparency in the carriers’ fee practices. A subsequent 2018 report acknowledged the importance of these charges in incentivising the movement of containerized cargo but warned against their excessive and unwarranted application. In May 2020, the FMC issued a final rule clarifying U.S. law interpretations concerning detention and demurrage practices. The newly introduced Final Rule on Detention and Demurrage Billing Practicescomplements the earlier regulation.

Europe: A Different Scenario

No comparable regulation exists in Europe. Charges are governed by maritime transport contracts based on the International Convention
for the Unification of Certain Rules of Law Relating to Bills of Lading, signed in Brussels on August 25, 1924, 100 years ago. This convention does not address the issue, leaving regulation to national legislation. In Portugal, the Decree-Law no. 352/86 of October 21
applies. However, it does not specify the information required in invoices issued by maritime carriers, defaulting instead to general legislation.
Despite the lack of a global mandate, maritime carriers are encouraged to adopt these practices worldwide to foster market transparency and avoid disputes arising from a lack of information and awareness among stakeholders in the maritime logistics chain.
The Federal Maritime Commission (FMC) is an independent federal agency that regulates the international maritime transport system in the US for the
benefit of American exporters, importers, and consumers. Its primary mission is to promote a highly competitive and reliable international maritime transport system that drives the US economy and protects the American public from unfair and deceptive practices.

Journal Article published in APAT Magazine No. 148 - July/August 2024

Consult at 49068C70-225D0_1.pdf (apat.pt)