May 19, 2024

FMC Implements Game-Changing Standards to Curb Container Late Fees

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In a bid to address the issue of abusive container late fees, the Federal Maritime Commission (FMC) has introduced new billing standards targeting demurrage and detention charges imposed by ocean carriers and terminal operators. Effective May 26, the regulations aim to enhance transparency and accountability in the industry while safeguarding the interests of shippers and other stakeholders.

Key Highlights of the New Requirements:

  1. Expedited Invoicing: Carriers and terminal operators are now mandated to issue detention and demurrage invoices within 30 calendar days from the last incurred charges.
  2. Enhanced Data Requirements: The regulations stipulate minimum data requirements for invoices, ensuring clarity and accuracy in billing processes.
  3. Refund Requests: Billed parties have at least 30 calendar days to request refunds, with carriers and terminal operators required to resolve disputes promptly.
  4. Consignee Invoicing: The provision allows for demurrage or detention invoices to be issued directly to the consignee, streamlining billing procedures.

These regulations, authorized by the Ocean Shipping Reform Act of 2022, signify a significant step towards promoting supply chain fluidity and curbing market power abuse. The FMC’s proactive approach reflects a commitment to fostering fair and transparent practices in the maritime industry.

Positive Reception from Stakeholders:

The Agriculture Transportation Coalition (AgTC) lauds the new rules as a major victory, marking progress towards reforming abusive practices despite opposition from ocean carrier and terminal organizations.

Similarly, the American Trucking Associations’ Intermodal Motor Carriers Conference (IMCC) welcomes the changes, particularly the clarification that motor carriers not contracted with ocean carriers will no longer receive unwarranted bills, thereby alleviating undue financial burdens.

Cautionary Notes:

While the regulations aim to promote accountability, concerns have been raised by industry stakeholders, including the World Shipping Council (WSC). The WSC warns that stringent requirements could inadvertently exacerbate port congestion by disincentivizing timely cargo pickup and equipment return.

In Conclusion:

The FMC’s implementation of new billing standards represents a pivotal moment in the maritime industry, signaling a concerted effort to address longstanding issues of transparency and fairness. While applauded by many stakeholders, ongoing dialogue and collaboration will be crucial to navigating potential challenges and ensuring the continued efficiency of global supply chains.

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