The U.S. Federal Maritime Commission (FMC) has urged the world’s top ocean carriers to adopt three best practices related to when and how detention and demurrage fees are applied, as well as how to dispute the charges.
The call for an industry-wide adoption of best practices came in a letter Federal Maritime Commission Managing Director Lucille Marvin sent to 25 container lines and the World Shipping Council, the trade association that represents liner shipping companies. The letter is the latest call of the FMC and follows the establishment of the Vessel-Operating Common Carrier (VOCC) Audit Program.
The program’s team has engaged the top nine ocean carriers, by market share, calling on ports in the United States to assess their compliance with the FMC rule on detention and demurrage instituted last year. As part of their work, the Team sought examples of model behavior by individual carriers that should become industry standards.
The correspondence sent to industry urges ocean carriers to:
- Display detention and demurrage charges clearly and prominently on their webpage or customer portal;
- Develop and document clear internal processes on all matters related to detention and demurrage where they have not already done so; and
- Clearly delineate dispute resolution procedures, contacts, and required documentation on their website and invoices.
In November 2020, FMC launched an investigation into cargo-related practices that are having a negative impact on congestion and amplifying bottlenecks at the ports of Long Beach, Los Angeles, New York and New Jersey.
With this investigation, FMC wanted to determine if the policies and practices of those shipping companies related to detention and demurrage, container return, and container availability for U.S. export cargoes violate the pricing regulations and practices under the Shipping Act.
In June this year, Biden’s administration issued an order tackling the consolidation in the container shipping industry as well as anti-competitive pricing, among others. The order came as the President wanted to promote competition in the US economy and enable faster economic growth.