The FMC has issued a final rule for demurrage and detention billing requirements, effective as of May 28, 2024. This ruling is in accordance with the Ocean Shipping Reform Act (OSRA’22) and requires common carriers and marine terminal operators to include specific minimum information on demurrage and detention invoices, amongst other changes.
Notable Takeaways
- The only entities that can invoice demurrage and detention charges are Marine Terminal Operators (MTOs), Vessel Operating Common Carriers (VOCCs), or Non-Vessel-Operating Common Carriers (NVOCCs).
- Only parties to the contract (Shipper or Consignee) may be issued an invoice. Third parties are allowed to pay on behalf of the billed-to party but are no longer liable for the charges which remain with the Shipper or Consignee. This is good news for truckers, customs brokers, or other third-party payers who in years past were often held accountable by the billing parties when they could not get others to pay.
- There are 20 data elements required to be on invoices for the charges to be valid. This includes the 13 data elements required by OSRA and seven more that were added by the FMC for purposes of clarity.
- All invoices for demurrage and detention must be issued within 30 days of the last event causing such charges.
- All invoice disputes must be lodged with the billing party within 30 days of the invoice date.
- Disputes must be settled within 30 days unless both parties agree to extend the process—taken altogether makes up the 30/30/30 rule.
These new regulations aim to reduce the number of invoices that are issued to the various parties connected to the transaction and clear up any confusion about who should be invoiced. The required data elements are intended to clarify why the charges have been assessed and aid the billed-to party in determining if there may be a dispute on the charges. The purpose of the 30/30/30 rule is to simplify the content and timing of the invoicing and dispute processes.
At Mohawk Global, we continue to successfully fight these charges—on behalf of our clients. If you’re looking for more information about the final rule or dispute resolutions, reach out to today.
