New rules issued by Federal Maritime Commission (FMC) clarify and simplify the process by which shippers are billed for detention and demurrage charges, relieving motor carriers who do not contract with ocean carriers from footing the bill.
The Ocean Shipping Reform Act, passed in 2022, required the FMC to specify who can be billed for detention and demurrage charges, and Intermodal Motor Carriers Conference Executive Director Jonathan Eisen noted that motor carriers often face major detention and demurrage charges from ocean carriers when shipping containers are delayed – either on the dock or after being taken off the port complex – even though trucking firms are not party to the contracts between the ocean lines and their shippers.
“The new rule will require ocean carriers to work directly with their customers, increasing incentives for faster dispute resolutions and bringing greater efficiency to the supply chain,” Eisen said, adding that during the supply chain disruptions of the pandemic, these passed-along charges resulted in major increases in costs for shippers that ultimately were passed onto American consumers.
The rule is the first significant change to ocean shipping regulations in more than two decades.
In his State of the Union address last March, President Joe Biden called on Congress to address ocean carriers’ high prices, citing rising ocean shipping costs as a major contributing factor to increased costs passed on to American families. "During the pandemic, ocean carriers increased their prices by as much as 1,000%," Biden said then. "And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead."
