Federal Maritime Commission Staff Report on Detention, Demurrage, and Free Time Released

The following release was posted on the Federal Maritime Commission website.

Staff Report on Detention, Demurrage, and Free Time Released

April 13, 2015

NR 15-03

Contact: Karen V. Gregory, Secretary (202-523-5725)

The Commission voted at its meeting today to release a staff report entitled: entitled Report: Rules, Rates, and Practices Relating to Detention, Demurrage, and Free Time for Containerized Imports and Exports Moving Through Selected United States Ports.” Using publicly-available information, the report generally assesses and explains the rules and practices by a sampling of vessel-operating common carriers at each terminal in the Nation’s largest container ports. The report touches on concerns expressed by importers, exporters and drayage providers. The report indicates steps that the industry may take to address their concerns and, as well, indicates the types of Commission authority that may be brought to bear where the facts and circumstances support Commission action.

This report was compiled after completion of the four congestion forums held by each of the Commissioners at major gateway ports in the fall of 2014 and subsequent contact from stakeholders. The Commission also voted today to release the meeting transcript related to the staff report once it becomes available.

Chairman Cordero commented:

“I am hopeful that the report becomes a discussion paper among industry stakeholders and helps stimulate solutions to problems that have arisen as a result of the severe port congestion experienced in the last year. The report primarily frames the relevant issues, including: defining terms associated with the application of demurrage and detention rules; who controls the charges (e.g., carriers, Marine Terminal Operators or Port Authorities); and, potential actions that may be taken. The Commission staff report does not recommend any action by the Commission, nor did the Commission authorize any to be taken. Any action in the future by the Commission on its own motion, is not a matter for consideration at this time.”

“The Commission has heard from many importers, exporters, and drayage trucking companies complaining about demurrage and detention charges that they must pay even though they cannot timely access their cargo or drop it off before free time expires. Though the Commission has received anecdotal evidence, the industry is encouraged to submit substantive documentation and information of unreasonable practices regarding the application of demurrage or detention. The documentation could include information related to those who pay the charges or to those who impose the charges. In addition, industry stakeholders are reminded that they may file complaints for adjudication at the Commission that involve alleged violations of the Shipping Act.”

The Federal Maritime Commission is the federal agency responsible for regulating the nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.