FMC Proposed D&D Billing Requirements Unfairly Target Contracted Parties, Trade Group Says
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.”
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In cases of import demurrage, for example, the contracted party “may be the overseas supplier that has no control over how the cargo moves from the port once it arrives into the United States,” NACD said. Requiring only the contracted party to be billed would “likely worsen demurrage issues and undermine port efficiencies,” the group said, noting that “consignees would be forced to wait for the demurrage fees to be invoiced and paid by the overseas supplier that may lack credit with the carrier and is less likely to be motivated to make timely payments to facilitate movement of the cargo from the terminal facility.”
With export demurrage, the consignee is “typically” the charged party, “regardless of whether they are the party contracting with the carrier.” Because of this, NACD said, the FMC should “modify the rule” to “require demurrage charges to be invoiced to the consignors named in the bill of lading for U.S. exports and to the consignees named in the bill of lading for U.S. imports, except where an alternative party has expressly requested to receive the invoices.” In cases where a “separate written contract includes negotiated demurrage and detention provisions that requires invoicing and payment liability for such charges only between the contracting parties,” NACD said, “then the contract’s terms should govern.”
The association also said it disagrees with the proposed 30-day timeline given for shippers to dispute charges. Many small shippers don’t have the “administrative bandwidth to examine carefully each of their detention and demurrage invoices within 30 days,” adding that each charge has “unique and complex scenarios that need to be investigated before they are disputed,” and shippers need more than a month to conduct that diligence. “Accordingly, NACD urges the FMC to remove this 30-day timeline requirement for disputing detention and demurrage charges,” the association said.
NACD also asked the FMC to make “slight changes” to the language surrounding earliest return date, container availability date, end date of free time, and start date of free time; clarify whether detention and demurrage invoices that are missing information can be corrected; and clarify its “authority to address intermodal detention and demurrage fees involving railroads.”
An FMC spokesperson has said the agency will review all comments submitted to the FMC before proceeding with a final rule.