Efforts by the Federal Maritime Commission to address issues around detention and demurrage (D&D) charges appear to making some measure of progress.
Lucille Marvin, the Commission’s managing director, is leading both the Vessel-Operating Common Carrier (VOCC) Audit Program and VOCC Audit Team, told commissioners that D&D issues remained persistent, but direct engagement with ocean carriers was yielding progress in changing behaviour and practices.
“As a result of the team’s initial review of carrier data last year, the VOCC audit team urged carriers industry-wide to adopt detention and demurrage best practices,” she said. “Since then, several carriers have restructured the information available on their websites, created streamlined dispute resolution processes, and developed more structured documentation regarding their detention and demurrage policies.”
While commissioners expressed concern about audit team data that showed carrier revenues from D&D charges were up sharply over 2021, commission staff made clear this was not an unexpected development given record volumes of trade and congestion throughout the US supply chain. Additionally, chassis shortages, insufficient warehouse space, and some shippers abandoning cargoes are contributing to the issuance of these charges.
“The vast increase in detention and demurrage charges being billed by the carriers is certainly concerning but must be seen in the context of the overall congestion situation at US ports and inland networks.
“Carriers are also waiving a much higher percentage of detention and demurrage charges, and that’s one indication that the 2020 interpretive rule and enhanced enforcement is changing some practices and reducing collections of unreasonable detention and demurrage charges. However, the audit findings also tell me that we have a long way to go and must not let up one bit either on our enforcement efforts or the additional rule making on detention and demurrage recommended by Commissioner Rebecca Dye,” stated FMC chairman, Daniel B. Maffei.
