FMC Proposes Strict Limits on D&D Billing Practices

The Federal Maritime Commission has proposed new rules to rein in excessive demurrange and detention billing practices, which have imposed millions of dollars in extra costs on shippers and drayage companies for the late return of empty containers - even when terminals refuse to accept them.

The commission's proposed rule build on a fact-finding investigation led by Commissioner Rebecca F. Dye, as well as comments and complaints from industry stakeholders. If adopted, it would require ocean carriers to bill D&D charges to the contracting party only (shipper or NVOCC). This would let trucking companies off the hook at last, relieving them of the longstanding burden of paying their customers' D&D charges when a container cannot be returned to the terminal. 

The rule may also require carriers to include "certain minimum information" in billing invoices in order to ensure clarity, including the identity of  parties billed, the time period in question, and concise information about the carrier's dispute resolution process. The FMC's objective is to reduce billing disagreements through transparency. 

This section of the rule could resolve anecdotal complaints of carriers billing multiple parties for the same charges, as well as ambiguities about start and stop dates for billing. The minimum billing information may also require a record of "clock-stopping events" which could justify time without charges - for example, lack of a return appointment, which is a common trucker complaint. 

The commission also plans to require carriers to send D&D invoices out within 60 days in order to address persistent complaints of late billing. "If a shipper receives a demurrage or detention bill months after the occurrence of the charge, they may no longer possess the necessary materials to confirm the charges are correct or to access the information necessary to dispute the charges," FMC noted.

The rule may also be expanded to cover charges issued by marine terminal operators and NVOCCs, depending on comments, FMC said. 

The rule fulfills a promise from Federal Maritime Commissioner Daniel Maffei, who pledged in August that he would address unfair D&D charges for unreturnable boxes. 

“I will do everything in my power to ensure that carriers do not receive involuntarily subsidized storage for empty containers that belong to them,” said Maffei at the time. “If it can be shown that a shipper or a trucker is not allowed to return a container then – not only should they not be charged per diem but – the carrier should compensate that trucker for the space it takes up.”