FMC Going Forward With Final Rule on Detention and Demurrage Charges

The Federal Maritime Commission will adopt a final rule to give industry guidance on how it assesses the “reasonableness” of detention and demurrage charges, the agency said on April 28. The rule has garnered new attention due to charges caused by COVID-19-related shipping delays (see 2003190041) and is meant to give industry clarity on how FMC will consider whether detention and demurrage policies incentivize the movement of cargo or whether they are unjustified. The rule will become effective upon its publication in the Federal Register.

The interpretive rule was proposed in September (see 1909130026). “This guidance for industry stakeholders will hopefully result in revised and reformed business practice that, in turn, will lead to improved freight fluidity,” Chairman Michael Khouri said in a news release. “As the Commission moves forward in this area, future actions may include Notices of Inquiry (NOIs) into various focused fact scenarios. These NOIs will be designed to bring public awareness to problematic business practices and provide further clarity to potential applications of the Interpretive Rule.”

Two “minor changes” were included in the final rule that weren't in the proposal, the FMC said. “The first clarifies that the guidance in the rule is applicable in the context of government inspections,” the FMC said. “The second clarifies that the rule does not preclude the Commission from considering additional factors, arguments, and evidence outside those specifically listed.”