Interim Report in Investigation of Detention & Demurrage Practices Released

Contact: John K. DeCrosta, (202) 523-5911

Bringing clarity, access, and efficiency to the delivery of cargo from carrier to shipper will be key to improving the process for how and when marine terminal demurrage and ocean carrier detention charges are levied.

This is among key initial observations made by Commissioner Rebecca Dye in the interim report for Fact Finding 28, an investigation into “Conditions and Practices Relating to Detention, Demurrage, and Free Time in International Oceanborne Commerce,” submitted to the Federal Maritime Commission yesterday during a closed meeting. Commissioner Dye serves as the Investigative Officer for Fact Finding 28, which was initiated in March of this year.

Over the past six months, Commissioner Dye has conducted scores of interviews with executives, managers, government officials, and policy experts with experience in, or specialized knowledge of, international ocean shipping and port operations. She also solicited submissions from shippers, consignees, and drayage providers.

“Throughout this process, my priority has been how ocean carrier and marine terminal demurrage and detention approaches can optimize, not diminish, the performance of the overall American international freight delivery system,” said Commissioner Dye.

As a concurrent part of the investigation, the Commissioner issued an information demand to ocean carriers and marine terminal operators (MTOs) which yielded extensive data related to demurrage and detention practices. These materials assisted Commissioner Dye in developing the preliminary observations contained in the report of her investigation.

Commissioner Dye advised the Commission that she has identified six areas to be developed:

1. Transparent, standardized language for demurrage, detention, and free time practices;
2. Clarity, simplification, and accessibility regarding demurrage and detention billing practices and dispute resolution processes;
3. Explicit guidance regarding types of evidence relevant to resolving demurrage and detention disputes;
4. Consistent notice to shippers of container availability;
5. An optional billing model wherein
   1. MTOs bill shippers directly for demurrage; and
   2. VOCCs bill shippers for detention; and
6. An FMC Shipper Advisory or Innovation Team.

“While Fact Finding 28 is an investigation, it also represents a unique opportunity for industry leaders to have their voices heard and their experiences recognized on an important policy and operational issue. I am grateful for the valuable contributions so many different parties from every sector of the industry made to this investigation. I look forward to continuing conversations with all industry leaders as we work to further develop the record and the above ideas.”

Commissioner Dye will speak publicly about the interim report at the Commission’s next meeting, scheduled to be held on September 19 at 10:00 a.m.