The National Association of Chemical Distributors (NACD) submitted comments to the U.S. Federal Maritime Commission (FMC) urging the commission to include additional guidance that clarifies the demurrage and detention billing practices to ensure the timely and expedited movement of ocean cargo.

Jennifer Gibson, NACD vice president of Regulatory Affairs, applauded the FMC for its efforts to promptly implement the recently enacted Ocean Shipping Reform Act, but underscored the potential unintended consequences of only allowing contracted parties to be charged with demurrage and detention fees.

“While NACD appreciates the intent of this regulation, which seeks to address potential billings to multiple parties for the same charges and limit dispute resolution to the parties contracting for the transportation of the goods, we are 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,” said Gibson. “This would cause additional delays, add more time for demurrage fees to accrue unnecessarily, and increase the potential for disputes.”

NACD also raised concerns over the 30-day timeline requirement to dispute detention and demurrage charges, warning that small shippers, including many NACD members, would be disproportionately impacted by this deadline.

“Detention and demurrage fees must meet their intended purpose of incentivizing the expedited movement of cargo, and invoices should be transparent and billed to the responsible party that has greater knowledge and control over the tender and pickup of cargo and use of equipment,” said Gibson. “Currently, this is often not the case and small shippers are forced to pay substantial detention and demurrage fees just to receive their cargo, without an ability to audit the assessed charges effectively. Adding necessary guidance and consistency to the billing practices for detention and demurrage fees is crucial in ensuring a strong ocean shipping industry, a strong American economy, and the public well-being."

NACD’s full comments can be read here.