Commission Approves Dye’s Final Recommendations on Detention and Demurrage

The Commission today adopted a set of recommendations made by Commissioner Rebecca Dye to address detention and demurrage charge issues uncovered during her 18-month Fact Finding 28 investigation.

Commissioner Dye submitted three proposals to the FMC. First, she recommended the agency publish an interpretive rule that clarifies how the Commission will assess the reasonableness of detention and demurrage practices. She also recommended establishing a Shipper Advisory Board and continued support for the Supply Chain Innovation Team working to address chassis availability issues in Memphis, TN.

The recommendations were submitted to the Commission on August 27, 2019.

The interpretive rule will incorporate the general guidance contained in the Fact Finding 28 Final Report published in December 2018. In that report, Commissioner Dye found that significant benefits to the U.S. international ocean freight delivery system and the American economy as a whole would result from:

• Transparent, standardized language for demurrage and detention practices;
• Clear, simplified, and accessible demurrage and detention billing practices and dispute resolution processes;
• Explicit guidance regarding the types of evidence relevant to resolving demurrage and detention disputes; and
• Consistent notice to cargo interests of container availability

Since issuance of the Final Report, Commissioner Dye has met with industry stakeholders to refine her findings and recommendations. The proposed interpretive rule would reflect those findings in the form of a non-exclusive list of considerations the Commission would use in assessing complaints regarding detention and demurrage practices. The Commission is confident that such guidance will promote the flow of cargo by ensuring that detention and demurrage charges serve their purpose of incentivizing cargo and equipment velocity. In the coming weeks, the Commission will issue a Notice of Proposed Rulemaking outlining in specific detail the Interpretive Rule on Demurrage and Detention and inviting public comment.

The Commission also approved the establishment of a Shipper Advisory Board that will most immediately assist in the implementation of the Fact Finding 28 recommendations, but in the future will provide advice to the agency on matters of concern and priority to domestic importers and exporters. Information on the size of the board, who may apply and how to express interest in serving as a member will be forthcoming.

“Our approach from the beginning has been to enhance the competitiveness of the U.S. freight delivery system. I deeply appreciate all the support I have received from my colleagues and industry leaders in all sectors of the supply chain—the carriers, ports, terminal operators, intermediaries, and of course, American importers and exporters,” said Commissioner Dye.

Finally, the Commission supported Commissioner Dye’s continued involvement in the Memphis Supply Chain Innovation Team which has been working to improve chassis availability at the railheads in that city via the establishment of a “gray pool” of equipment.