Shippers have been complaining for years that the rules governing demurrage and detention are unfair. Shippers are required to pick up and return ocean containers to the terminal within a specified number of days. Failure to do so will result in fees to the shipper known in the industry as demurrage and detention.
Marine terminals and carriers say the potential to be charged a fee is necessary to keep cargo flowing through the ports on a consistent basis. Without the fees, they claim shippers would use terminals as storage facilities creating tremendous gridlock. Shippers don’t quite see it that way. They are convinced the terminals and carriers use demurrage as a revenue generator not as a deterrent to keep cargo flowing.
The issue of whether the fees being charged for demurrage and detention are reasonable got the attention of The Federal Maritime Commission (FMC). The FMC felt it was necessary to intervene and gather insight from both sides of the issue. Shippers are not disputing that rules must be in place to ensure containers are removed and returned to the terminals in a timely manner. Their focus is on why they are still charged fees when factors outside of their control prevent them from meeting the rules in place. In many instances, truckers arrive at the terminal to pick up containers only to be faced with long lines. The congestion forces truckers to leave the terminal without securing any containers. Shippers wonder how being charged fees under the above circumstance can be deemed reasonable.
The FMC recently released recommendations that could help resolve some of the key issues. They made it clear that they are not trying to determine which side is at fault. Their recommendations focused on evidence needed for disputes, quick resolutions of any disputes, and standardized demurrage and detention fees. Shippers felt the FMC recommendations did not go far enough to address the severity of the issue. The FMC has since agreed to extend public comments on the issue until October 31, 2019.
Demurrage and detention fees have plagued the container shipping industry for decades. Whether the FMC is finally able to broker a fair and reasonable compromise remains to seen.
