A final rule was issued by the Federal Maritime Commission (FMC) with an effective date of May 26. The rule institutes new requirements for how ocean carriers and marine terminal operators (MTOs) must bill for demurrage and detention charges.
“The inclusion of Marine Terminal Operators in the rule will make billing practices more uniform across all possible sources of demurrage and detention invoicing, so everyone is playing under the same set of rules,” said NCBFAA NVOCC Subcommittee Chair Rich Roche, Senior Vice President at Mohawk Global.
This rule offers clarity on who can be billed, within what timeframe, and the process for disputing bills. In addition, demurrage and detention bills cannot be issued to multiple parties simultaneously. The rule requires common carriers and marine terminal operators to include specific minimum information on demurrage and detention invoices. The specific information required is still pending approval, under section 541.6, and then an effective date will be announced.
The rule also requires vessel-operating-common carriers (VOCCs), MTOs, non vessel-operating common carriers (NVOCC), and billed parties 30 calendar days to issue the invoices, make fee mitigations, refunds, or waiver requests. If a timely filed request is made, the billing party must attempt to resolve the matter within 30 calendar days, unless both parties agree to a longer timeframe.
“This is a major win for shippers and NVOCCs alike,” said Roche. The time frame in this ruling is pivotal, as in the past a dispute could go on for months at a time with no clarity on when it will be resolved. This will allow our teams at Mohawk Global to provide more timely service to our clients in fighting these charges.
