FMC proposal requires ocean carriers to give shippers more details on demurrage charges

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Ocean carriers will have to provide shippers with more complete documentation about demurrage charges and how to dispute the charges, according to a proposed rule unveiled Friday by the Federal Maritime Commission.

The rule, introduced as part of the Ocean Shipping Reform Act of 2022 enacted earlier this year, would deal with charges imposed on shippers when cargo is not moved within a specified time. Carriers have collected a record number of demurrage charges during the pandemic, and shippers say the charges are often opaque with few avenues to challenge them.

The FMC proposal would require carriers to issue invoices only to parties with whom they have contractual relationships. Additionally, carriers must issue invoices within 30 days of stopping charges and give shippers 30 days to dispute charges.

Shippers alleged that carriers had broadened the definition of who is a “trader” and imposed fees on those who had “no beneficial interest in the cargo,” former FMC chairman Michael Khouri said in a statement. in 2020 during a survey of billing practices. The agency has worked over the past two years to investigate and audit carrier demurrage and detention practices, and found that nine major shipping carriers billed shippers $5.3 billion in 2021, with just 646, $7 million eventually canceled.

Stakeholders have 60 days to respond to the CMF’s proposal. The agency said it was particularly interested in “receiving feedback on whether to include the consignee named on the bill of lading as another party who may receive a demurrage or detention bill.”

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