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The Federal Maritime Commission (FMC) issued its long-awaited final rule on detention and demurrage billing practices in 2024. This regulation is a critical development for shippers, carriers, and logistics providers, aiming to increase transparency, accountability, and fairness in how these charges are assessed and communicated. Here’s what you need to know about the FMC’s latest rule and how it could affect your operations.
What are detention and demurrage charges?
Detention and demurrage charges are a fundamental part of shipping operations.
These charges are intended to encourage efficient cargo movement and container returns, but unclear billing practices have often led to disputes between shippers and carriers.
What does the FMC’s final rule entail?
The 2024 FMC Final Rule addresses concerns around billing transparency and provides a framework to reduce disputes and inefficiencies. Key highlights include:
1. Mandatory invoice information: Common carriers and marine terminal operators are now required to include specific minimum information on demurrage and detention invoices. This ensures that billed parties fully comprehend the charges levied.
- Timely issuance of invoices: The rule mandates that invoices for demurrage and detention charges be issued within 30 calendar days from the date when charges were last incurred. This prompt billing facilitates efficient financial planning and dispute resolution.
- Defined dispute resolution timeline: Billed parties are granted a minimum of 30 calendar days to request fee mitigation, refunds, or waivers. Upon receiving such requests, billing entities must endeavour to resolve the matters within 30 calendar days, unless both parties agree to an extended timeframe.
- Clarification on billing parties: The FMC has specified that demurrage and detention invoices should be directed to the person for whose account the billing party provided ocean transportation or storage of cargo and who contracted with the billing party for these services, or to the consignee. This clarification aims to prevent billing disputes and ensure accountability.
How Noatum Logistics can support your compliance efforts
Our team has proactively updated our billing systems and procedures to align with the new requirements, reaffirming our commitment to transparency, efficiency, and client satisfaction. Our team of experts ensures that your operations align with global trade regulations, including the FMC’s latest requirements.
Let us help you navigate the complexities of international shipping regulations and keep your supply chain running smoothly. By standardising billing procedures and clarifying responsibilities, the rule aims to mitigate disputes and enhance the overall efficiency of global trade operations.
Experience the Noatum Logistics difference in logistics and compliance. Reach out to us now to ensure your business is ready for the challenges and opportunities ahead.
Sources:
Avda. De Italia nº2 – CTC