FMC Announces Actions to Address Demurrage and Detention Charges

Holland & Knight LLP

The Federal Maritime Commission (FMC) announced on Sept. 15, 2021, that it would move forward with two demurrage-and-detention related initiatives proposed by Commissioner Rebecca F. Dye as part of Fact Finding 29.

The first initiative is issuing a "policy statement" concerning FMC private party complaints. Based on the recommendations in Fact Finding 29, the policy statement is expected to address guidance 1) on the scope of the Shipping Act's anti-retaliation prohibition "for any other reason", 2) that unsuccessful complainants are not automatically required to pay opposing attorney's fees, and 3) that shippers and trade associations may have standing to bring private party complaints.

The second initiative is commencing a rulemaking process on specific demurrage and detention issues in the form of an Advance Notice of Proposed Rulemaking (ANPRM). The yet-to-be published ANPRM would solicit public comments on 1) whether the FMC should require carriers and marine terminal operators (MTOs) to provide certain minimum information on or with demurrage and detention invoices, and 2) whether the Commission should require carriers and MTOs "to adhere to certain practices regarding the timing of demurrage and detention billings." In each case, the underlying Fact Finding 29 recommendation referred to the final rule of the Surface Transportation Board (STB) on demurrage and billing practices related to Class I rail carriers.

The announcements come as historic supply chain congestion continues to impact the shipping, terminal, rail and trucking industries, which has also exacerbated questions involving intermodal demurrage and detention practices. Interested stakeholders should closely monitor the FMC's guidance and proposed rulemaking to ensure that stakeholder views and concerns are fully represented in any proposed regulatory actions on demurrage and detention.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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