The Federal Maritime Commission (FMC) has established a new audit programme and dedicated team to assess carrier compliance with rules on detention and demurrage and monitor the ocean cargo services marketplace.
In a statement the FMC said the ‘Vessel-Operating Common Carrier Audit Program’ has been established following direct instruction from Chairman Daniel B. Maffei and will come into operation immediately.
The Audit Program will analyse the top nine carriers by market share for compliance with the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices in the United States.
The Commission will work with companies to address their application of the rule and clarify any questions or ambiguities. Information supplied by carriers may be used to establish industry best practices.
Other focus areas of the audit process may include practices of companies related to billing, appeals procedures, penalties assessed by the lines, and any other restrictive practices.
Chairman Maffei said the FMC is committed to making certain the law is followed and that shippers do not suffer from “unfair disadvantages”.
“The work of the audit team will enable the Commission to monitor trends in demurrage and detention practices and revenue, as well as to establish ongoing dialog between staff and carriers on challenges facing the supply chain,” Maffei said.
“Of course, if the audit team uncovers prohibited activities, the Commission will take appropriate action. Furthermore, the information gathered by the audit process might lead to changes in FMC regulations and industry guidance if warranted.”
The Audit Program will begin with an information request establishing a database of quarterly reports allowing the Commission to assess how detention and demurrage is administered.
Responses will be followed by individual interviews with the carriers. Each of the nine largest carriers by market share will be audited irrespective of whether a formal or informal complaint has been filed at the FMC.