FMC Wants Input on Detention and Demurrage Charges for Brokers, Forwarders, Official Says

CORONADO, Calif. – The Federal Maritime Commission needs industry input into key provisions of its newly announced detention and demurrage proposed rule (see 2210070079), and in particular on a provision limiting charges only to parties that have a contractual relationship, said Lucille Marvin, FMC managing director, during a panel discussion Oct. 8 at the Western Cargo Conference.

Asked whether the proposal applies to customs brokers and freight forwarders, Marvin said the FMC is grappling with how exactly it will interpret that provision. “That’s why we need comments,” Marvin said. “These are the things we really need to hear from industry,” she said. “Who are those actors that we’re talking about? What does the commission specifically really need to be aware of when you’re talking about who has a contractual relationship or not? We know this is a hot topic.”

The new detention and demurrage rule was required by the Ocean Shipping Reform Act of 2022. The law also created new “charge complaints,” a less burdensome way for shippers to dispute charges than the formal complaint process, which can take three years and at least $300,000 in legal fees, according to Peter Friedmann, Pacific Coast Council counsel.

One problem with the new process is that the FMC has rejected 50% of all charge complaints filed, some of them before they concerned charges prior to OSRA’s enactment June 16, said Rich Roche of Mohawk Global. That may make sense for new requirements that took effect on that date, but charges that were illegal prior to that date should be subject to the charge complaint process, he said.

Marvin acknowledged that “the June 16, 2022, date is problematic for some,” but that’s when the FMC received the authority for the charge complaint process, she said. “We’re saying if the charges occurred before then we don’t have the authority to shoot it through the process, but anything after that date we can handle,” Marvin said. “I know people have arguments for and against that, and we’re willing to hear those,” she said.