Your shipment has been delivered and freight charges have been paid. Then, weeks, or even months later, you get another bill for demurrage, charged for dwell time at the terminal, or detention, charged per diem for late return of the container.
Sound familiar?
This situation plays out daily in our industry. Both the carriers and the terminals require payment in advance of freight release. There is no workable strategy other than to pay the charges in advance to stop the bleeding and dispute them later.
If you find yourself in this situation, you may wonder, how would you initiate a complaint? Where would you start the dispute process?
The Federal Maritime Commission’s (FMC) Interpretive Rule of 2020 explains that demurrage and detention are valuable charges when applied in ways that incentivize cargo interests to move cargo promptly from ports and marine terminals. However, the Interpretive Rule also states, “when incentives such as demurrage and detention no longer function because shippers are prevented from picking up cargo or returning containers within time allotted, ‘[absent extenuating circumstances],’ charges should be suspended.”
You may have a case, if you could not be incentivized to pick up or return the container any sooner due one or more of the following (non-exclusive):
- Container not available
- Terminal closed
- Closed area of terminal
- Denied free time
- No appointments
- Government hold
- Communication Delays
- ERD Change
- Involuntary rolled booking
- Once in demurrage, always in demurrage
- Empty return yard closed
- No empty return appointments available
- No single-move returns accepted
- Required/specified chassis not available
- Charged under Carrier Haulage
- Threats to stop doing business for nonpayment
- Threat of Retribution
- Other unreasonable practice
Once it is determined that you have a grievance, the best place to start is with the carrier’s resolution process found at OCEMA Best Practice for Detention and Demurrage Dispute Resolution Processes, or the terminal’s process, via their website. Sometimes the invoice will include dispute instructions. If the dispute cannot be settled with the carrier or terminal directly, you can proceed with the FMC in any one of the four following ways:
- CADRS – Consumer Affairs and Dispute Resolution Service
- Small Claims Process
- Formal Complaint Process
- Charge Complaint
If none of these choices are workable, there is always the option of filing a complaint in Federal Court. At Mohawk Global, we continue to successfully assist, on behalf of our clients, in fighting these charges. Looking for more information about dispute resolutions or need a logistics partner for your supply chain? Reach out to Mohawk Global.
