The Federal Maritime Commission (FMC) has issued new rules governing how common carriers and marine terminal operators (MTOs) must bill for demurrage and detention charges.
The majority of the demurrage and detention rules will go into effect on 26 May 2024.
FMC revealed that billed parties have at least 30 calendar days to submit charge reduction, refund, or waiver requests.
If a timely request is lodged, the billing party must try to settle the issue within 30 calendar days, unless both parties agree to a longer deadline.
A significant feature of this regulation is that demurrage or detention bills can only be issued to either the person for whose account the billing party provides maritime transportation or storage of cargo or the person who contracted with the billing party for ocean transportation or storage of cargo.
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On the other hand, the ‘consignee’ is described as ‘the ultimate recipient of the cargo; the person to whom final delivery of the cargo is to be made’.
FMC noted that a demurrage or detention charge cannot be served on multiple parties simultaneously. The law also requires VOCCs and MTOs to send detention and demurrage bills within 30 calendar days of the costs being incurred.
Non-vessel operating common carriers are required to issue demurrage and detention invoices within 30 calendar days of receiving the invoice.
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According to FMC, the new regulation will assist the Commission in achieving its goal of increasing supply chain flexibility by providing a clear link between failing to pick up cargo or return equipment on time and incurring the corresponding fines.
The rule ensures that billed parties understand the demurrage or detention invoices they receive by mandating the billing party to include precise identifying information on each invoice.
