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November 30, 2023

US: FMC Issues New Guidance On Detention, Demurrage & Data Initiatives

BY Shivani

The Federal Maritime Commission (FMC)  issued new guidance for detention, demurrage and data initiatives in the open and closed session on Thursday. The meeting was held to discuss ocean carriers’ detention and demurrage practices to improve supply chain data transparency. Investigation of Canadian government ballast water regulations which impacts the U.S. flag Great Lakes shipping was also discussed in the meeting. 

Lucille Marvin, the Commission’s Managing Director, leading both the Vessel-Operating Common Carrier (VOCC) Audit Program and VOCC Audit Team, stated that detention and demurrage issues remain tenacious within liner shipping. The direct engagement with ocean carriers is making progress in changing behavior and practices.  

Several carriers restructured the information on their websites, creating a streamlined dispute resolution process after the VOCC Audit Team requested them to adopt industry-wide detention and demurrage best practices last year. 

Commissioners manifested the issues and concern regarding the data showing carrier revenues from detention and demurrage charges were rising sharply over 2021, staff pointed out that the increase should be expected given record volumes of trade and congestion in the US supply chain. 

FMC Chairman Daniel B. Maffei stated, “The carriers’ massive increase in detention and demurrage costs is alarming, but it must be viewed in the context of the broader congestion situation at US ports and interior networks. Carriers are also waiving a considerably higher percentage of detention and demurrage costs, which is one sign that the 2020 interpretative rule and increased enforcement are modifying some practices and lowering collections of unjustified detention and demurrage charges. 

“Commissioner Rebecca Dye has suggested that the audit findings, however, show that we still have a long way to go and that we must not relent in our enforcement efforts or in the additional rulemaking on detention and demurrage,” said Daniel B. Maffei. 

Commission staff offered a briefing on a draft Advance Notice of Proposed Rulemaking (ANPRM) that would be submitted to the Commission during the closed session. The draft ANPRM asks for feedback on whether the Commission should compel common carriers and marine terminal operators to publish specified minimum information on or with demurrage and detention billings, which was earlier recommended by  Rebecca F. Dye’s Fact-Finding 29 Interim Report in July 2021. 

The VOCC Audit Program, VOCC Audit Tea, and the MTDI were established at the direction of Chairman Maffei last year to address the underlying concerns about the domestic supply chain network congestion. 


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