FMC Demurrage and Detention Billing Rules: New vs. Previous

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FMC Demurrage and Detention Billing Rules: New vs. Previous

May 28, 2024

New regulations from the Federal Maritime Commission (FMC) aim to enhance transparency and fairness in demurrage and detention billing. These changes impact the issuance of invoices, designate the recipients, and address dispute resolution procedures.

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Below is breakdown of the key differences between the previous and new rules (effective May 28, 2024):

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FMC Demurrage and Detention Billing Rules: New vs. Previous

	Feature	Previous Rules	New Rules
1	Invoice Recipient	Unclear; could be party responsible for cargo (consignee) or party with whom carrier has a contract (shipper/consignee/NVOCC)	Must be sent to the party with whom the carrier has a contractual agreement (typically the shipper)
2	Invoice Details	Less specific; details on free time, commencement/stop times, and explanations for charges might be missing	Must include: Free time period for container pickup or return Commencement and stop times for demurrage or detention charges Any additional details explaining the charges (e.g., reasons for delays)
3	Dispute Resolution	No standardized process; disputes could be lengthy and unclear, with varying timeframes for contesting charges and reaching resolutions	Standardized 30-day window for the billed party to contest charges Carrier has 30 days to resolve the dispute (extendable by mutual agreement)
4	Invoice Issuing Party	Unclear; invoices could come from various parties involved (carrier, terminal operator)	Invoice must be issued by the party directly involved in the demurrage or detention (typically the carrier)
5	Invoice Timeframe	No specific timeframe for issuing invoices	Invoices must be issued within 30 calendar days of the demurrage or detention event

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Key changes:

Clearer Billing

Invoices must now be sent to the party with a contractual agreement with the carrier, eliminating confusion about who is responsible for payment.

Detailed Invoices

Invoices need to be more informative, including specifics like free time allowed for container pickup or return, exact start and end times for demurrage or detention charges, and any additional explanations justifying the fees.

Streamlined Dispute Resolution

A standardized 30-day window is established for the billed party to contest charges. The carrier then has another 30 days to address the issue, with the possibility of an extension if both parties agree.

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Learn more: https://www.fmc.gov/

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