Federal Maritime Commission to assess carriers’ compliance on demurrage and detention

News - Shipping and Freight Resource

The Federal Maritime Commission has established a new audit program and dedicated audit team to assess carrier compliance with the Agency’s rule on detention and demurrage as well as to provide additional information beneficial to the regular monitoring of the marketplace for ocean cargo services.

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The impact of congestion and capacity on businesses and what to expect?

Webinar

Port Congestion, equipment and space capacity crunch are impacting businesses with supply chains and consumers heavily impacted..

In a webinar, Rachel Premack, Senior Investigations Reporter at Business Insider, Michael J Gordon, Senior FMC Advisor (retd), and Adam Compain, SVP of Global Growth at project44 discuss how rising freight prices have set off a domino effect, manifesting across supply chains through port congestion, drayage holdups, dropping inventories, inflation and lengthening lead times..

They reference insights from a market survey of over 200 supply chain professionals and talk through a possible timeline to a freight market cool down, when it can potentially happen and the circumstances that will lead us there..

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Preliminary findings of Fact Finding 29 identifies key measures to improve efficient cargo movement in US Ports

FMC Fact Finding 29 - Shipping and Freight Resource

The FMC set up Fact Finding 29 in March 2020 in response to many complaints raised with the FMC to investigate challenges to the freight delivery system in the USA and possible violations of the Shipping Act..

Commissioner Rebecca F. Dye was tasked by the FMC to carry out the investigation with the full authority under 46 C.F.R. §§ 502.281 to 502.291, to perform such duties as may be necessary in accordance with U.S. law and Commission regulations..

In her Executive Summary to the Subcommittee on Coast Guard & Maritime Transportation in June, Commissioner Dye reported that four key key measures to improve efficient cargo movement in US Ports have been identified..

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Demurrage, Detention & Managing Port Operations : A Conversation with FMC’s Commissioner Carl Bentzel

Executive Insights - Shipping and Freight Resource

The Federal Maritime Commission (FMC) has been thrust into the limelight recently due to various challenges faced by the trade and complaints laid by customers in terms of demurrage and detention … Read more here..

Ocean Carriers to receive Information Demand Orders from FMC – FF29

FMC - Fact Finding 29 - shipping and freight resource

On 17th of Feb 2021, based on Fact Finding 29, the FMC has announced that Commissioner Rebecca F. Dye will issue information demand orders to ocean carriers and marine terminal operators (MTOs) to determine if legal obligations related to detention and demurrage practices are being met.

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FMC questions definition of “merchant” in carrier bill of lading

My Opinion

This definition of the term “Merchant” has caught the attention of the Federal Maritime Commission (FMC) who is soliciting public comment as to

  1. How VOCCs apply the term “Merchant” in their bills of lading;
  2. Whether the definition, as applied, subjects third parties who are not in contractual privity with the carrier to joint or several liability; and
  3. Whether carriers have enforced the definition of merchant against third parties that have not consented to be bound by, or otherwise accept, the terms and conditions of the bill of lading.

I have shared my personal opinion on this.. Have a read and share yours..

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What the Final Interpretive Rule by the FMC on demurrage and detention says

causes of demurrage and detention

The issue of what the Federal Maritime Commission (FMC) may consider in assessing whether a demurrage or detention practice is unjust or unreasonable has seemingly been put to rest with FMC having the final word..

On the 28th of April 2020, the FMC issued its final rule on its interpretation of the Shipping Act prohibition against failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property with respect to demurrage and detention..

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Path for Tradelens Agreement seems clear

logistics technology - shipping and freight resource

The TradeLens Agreement which “authorizes the parties to cooperate with respect to the provision of data to a blockchain-enabled, global trade digitized solution that will enable shippers, authorities and other stakeholders to exchange information on supply chain events and documents” is seemingly cleared to go live as it goes unchallenged within the timeframe given by FMC..

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FMC calls for public comment on demurrage and detention

shipping and freight news

Demurrage and Detention has been a bone of contention between shipping lines and customers for several years..

Shipping lines have been charging demurrage and detention costs on containers that the customers do not pick up or turn in on time, a situation that prevents shipping lines from utilising their equipment effectively..

Customers (importers mainly) on the other hand have been complaining about shipping lines using unfair practices when charging demurrage and detention even if the fault is not on their side..

Maybe there is truth on both sides and in terms of this issue, the Federal Maritime Commission (FMC) is not leaving anything to chance..

The FMC has called for public comment on its Interpretive Rule on Demurrage and Detention under the Shipping Act and in assessing just and reasonable regulations and practices relating to demurrage and detention charges..

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