Food importer Bakerly failed to establish that carrier Seafrigo USA violated shipping regulations in its complaint to the Federal Maritime Commission last year, Seafrigo told the FMC this week, adding that the importer's reasons for avoiding paying detention and demurrage charges "cannot withstand scrutiny." New Jersey-based Seafrigo asked the FMC to "reject" Bakerly's complaint and "hold that Bakerly is responsible" for more than $2 million in demurrage and detention charges that Seafrigo "paid on its behalf."
Detention and demurrage
Demurrage is the time that filled containers spend inside a terminal when imported into the U.S. This is measured from the time they are offloaded from the vessel until the time they are picked up at the port. Detention is the time that containers spend outside the terminal. This is measured from the time between picking the containers up from the port and returning them to the port when they are empty. Demurrage and detention penalty charges will be incurred if an importer does not pick up the filled container or drop off the empty container in the time allotted by the port or carrier. The Federal Maritime Commission regulates detention and demurrage charges in the ocean environment.
The Federal Maritime Commission published its fall 2022 regulatory agenda, including mentions of several rules surrounding carrier practices, billing requirements and discriminatory shipping practices that it had hoped to issue in December. At least one of the rules was governed by a statutory deadline set for last month under the Ocean Shipping Reform Act.
Shippers mostly supported the Federal Maritime Commission’s proposal for demurrage and detention billing requirements (see 2210070079 and 2203250028), saying in comments this month the new invoice requirements will bring more transparency to the industry. But at least two carriers continued to lobby for revisions to the proposed requirements, saying they could lead to burdensome new rules and wouldn’t result in more efficient container pickups and returns.
The Federal Maritime Commission’s proposed demurrage and detention billing requirements (see 2210070079) may lead to “unintended consequences” by only allowing “contracted parties to be charged with demurrage and detention fees,” the National Association of Chemical Distributors said Dec. 13 in comments to the FMC. NACD is “concerned that this requirement would in some cases force parties that are not responsible for the conduct that caused the incurrence of the demurrage and detention fees to be charged and liable for detention and demurrage fees,” NACD Vice President of Regulatory Affairs Jennifer Gibson said. “This would cause additional delays, add more time for demurrage fees to accrue unnecessarily, and increase the potential for disputes.”
MSC Mediterranean Shipping Company (USA) Inc. violated the Shipping Act when it failed to meet “minimum” requirements related to its detention and demurrage invoices for container shipments from Russia to Seattle, construction services company Doka said in a recent complaint to the Federal Maritime Commission. Doka said MSC charged it more than $260,000 in detention and demurrage charges for delays that the shipping line had caused, calling its practices “unfair” and “unreasonable.” The FMC should order MSC to pay Doka reparations and force the shipping company to waive the fees, Doka said.
The Federal Maritime Commission issued a draft “Finding of No Significant Impact” for its recent proposed demurrage and detention billing requirements (see 2210070079), the agency said in a notice released last week. The finding will become final within 10 days of the notice’s publication in the Federal Register "unless a petition for review is filed," the FMC said. Petitions for review must be submitted on or before Dec. 9.
Flexport denied allegations by Indiana-based Philip Reinisch Co. that it violated the Shipping Act and asked the Federal Maritime Commission to dismiss the September complaint, which said Flexport failed to include required information on more than $100,000 worth of detention and demurrage charge invoices (see 2210040021).
A recently signed California law will “significantly” limit the ability of marine container providers or terminals to impose detention and demurrage charges, law firm Cozen O’Connor said in an alert this month. The law, effective Jan. 1, outlines 10 situations in which container providers will not be able to begin or continue free time or impose fees on motor carriers and cargo owners “due to circumstances ostensibly beyond those parties’ control,” the firm said.
The Federal Maritime Commission this week officially sent its proposed rule on demurrage and detention billing requirements to the Federal Register (see 2210070079). Public comments on the rule are due Dec. 13.
Flexport violated the Shipping Act when it failed to include required information on more than $100,000 worth of detention and demurrage charge invoices, Indiana-based Philip Reinisch Co. said in a recent complaint to the Federal Maritime Commission. Philip Reinisch said the FMC should order Flexport to refund more than $55,000 in paid invoices, award it damages for the “wrongful withholding” of containers and nullify nearly $50,000 in outstanding charges.