In an ideal world, there’d be no demurrage and detention penalties. But, as contentious as these charges are, they are necessary to keep global trade flowing. Yes, they have been a source of frustration across the logistics industry, especially because of unclear billing practices and disputes over responsibility.

Now, new regulations introduced by the Federal Maritime Commission (FMC), as influenced by the Ocean Shipping Reform Act (OSRA) of 2022, aim to bring clarity, accountability, and efficiency to demurrage and detention processes. Here’s how.

Enhanced Billing Clarity and Dispute Resolution

One of the standout changes introduced by the FMC is the requirement for greater transparency and fairness in billing for detention and demurrage fees. Previously, shippers have faced unclear invoices or charges that didn’t reflect actual container use.

• Clear and Transparent Billing: Under the new regulations, invoices must include all relevant details such as container identification numbers, billing dates, and an exact calculation of charges.

Plus, these invoices can only be issued to the contracting party or consignee, meaning the right party is billed. Carriers are also required to issue these invoices within a specific time frame to avoid retroactive billing disputes.

• Streamlined Dispute Resolution: In cases in which discrepancies arise, shippers and BCOs now have a structured process to challenge charges. They can resolve issues directly with carriers or escalate them to the FMC’s Consumer Affairs and Dispute Resolution Services.

In more complex disputes, legal action before FMC judges is also an option. These measures provide shippers with a clear path to tackle unjust charges, reducing the financial strain caused by contentious fees.

Improved Transparency and Accountability in Invoicing

Under the new regulations, a higher standard has been set for invoice transparency, which makes it easier to tackle the difference between demurrage and detention fees and their application.

• Mandatory Information: Each invoice must now include a detailed breakdown of charges, calculation methods, and specifics such as container numbers, free time allowed, and the start and end dates of demurrage or detention. This mandatory transparency promotes fairness and minimizes disputes, as every charge can be verified against objective criteria.
  
  
• Accountability for Carriers and Terminals: By enforcing detailed invoicing requirements, the FMC holds carriers and terminal operators accountable for their billing practices. This reduces the risk of arbitrary or inflated charges and helps develop a more predictable and equitable environment for shippers. Plus, better invoicing practices make it easier for companies to manage cash flows and plan logistics budgets effectively.

Proactive Adaptation to Supply Chain Dynamics

To navigate the new regulations, shippers and logistics companies must have proactive strategies that use technology and real-time data.

• Real-Time Data Tracking: The ability to track container movements in real time has become a must-have for managing demurrage and detention fees. Accurate tracking equips shippers to monitor container dwell times, avoid penalties, and make timely adjustments to their operations. Advanced systems like transportation management systems (TMSs) and Internet of Things-powered solutions provide visibility into port conditions, making sure that shipments are handled efficiently.
  
  
• Adapting to Dynamic Conditions: Companies that proactively adapt their supply chains to real-time data insights can minimize unnecessary fees. For example, adjusting shipment schedules based on port congestion or using predictive analytics to plan container returns can reduce exposure to demurrage and detention charges. By integrating these tools, logistics operators can align their operations with the regulatory push toward accountability and efficiency.

Don’t Let Demurrage and Detention Fees Dictate Your Operation

The new FMC regulations are transforming how demurrage and detention practices are managed across logistics.

By promoting transparency in billing, enforcing accountability, and encouraging proactive supply chain management, these changes empower shippers, BCOs, and freight forwarders to operate more efficiently and cost-effectively.

With clearer invoices, structured dispute resolution, and the ability to adapt to real-time data, the industry is moving toward a more predictable and equitable framework.

To fully capitalize on these changes, integrating cutting-edge tools and solutions is key. Vizion provides powerful services that equip businesses to stay one step ahead:

• Real-Time Container Tracking: Access the most complete, standardized, and detailed container tracking events via API or user interface for seamless logistics management.
  
  
• TradeView: Monitor live shipment flows up to 90 days before arrival, analyze trends across a decade of historical data, and gain insights from 900 million shipment records to optimize global trade decisions.
  
  
• Logistics Performance Hub: Use global logistics datasets, including port performance and real-time activity, to make smarter decisions about containerized freight movements.

Book a demo with Vizion to see how our solutions can help you thrive in the age of regulatory transformation.

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