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Detention and Demurrage
The Commission’s current focus on issues related to detention and demurrage dates back to 2014 when the Commission hosted multiple forums on maritime congestion. The feedback received from these forums was integrated into the 2015 FMC report, “Rules, Rates, and Practices Relating to Detention, Demurrage, and Free Time for Containerized Imports and Exports Moving Through Selected United States Ports.”
In 2018, Commissioner Rebecca Dye was named the investigative officer for Fact Finding 28, which focused on the impact of detention and demurrage on supply chain efficiency. Commissioner Dye issued multiple recommendations from this fact-finding, including a proposed interpretive rule on detention and demurrage under the Shipping Act. The NPRM for the interpretive rule received over 100 comments from the public and the final rule was issued in May 2020.
The pandemic brought additional challenges to the supply chain and, in response, the Commission initiated Fact Finding 29, again with Commissioner Rebecca Dye as investigative officer. While this fact finding centered on engagement with supply chain stakeholders to identify solutions to the pandemic’s disruption of the supply chain system, maritime congestion resulted in renewed attention on detention and demurrage.
As part of the fact finding, Commissioner Dye issued an information demand on detention and demurrage practices among carriers and the largest marine terminal operators. The Fact Finding 29 recommendations included the proposed issuance of a rulemaking concerning information on detention and demurrage billings. An Advance Notice of Proposed Rulemaking was issued by the Commission in February 2022.
Detention and Demurrage Data
As part of the audit program, data are collected quarterly from the following carriers: CMA CGM, COSCO, Evergreen, Hapag-Lloyd, Hyundai Merchant Marine, Maersk, Mediterranean Shipping Company, ONE, and Yang Ming.
These data are provided for a general understanding of the scope of detention and demurrage billed and paid to carriers. Detention and demurrage accrues from extended use of equipment and congestion at terminals and inland points drives extended use of equipment.
Line chart depicted indexed growth in detention and demurrage biller, collected, and waived from quarter 2 2020 through quarter 3 2022.
Aggregating the information provided by all carriers and indexing to a base of 100 for Q2 2020, the total amount of detention and demurrage billed increased roughly nine-fold and collected increased roughly ten-fold between Q2 2020 and Q1 2022. In Q2 and Q3 2022 these two indexes decreased substantially. The index for detention and demurrage billed has decreased 10 percent from its Q1 2022 peak and detention and demurrage collected has dropped 15 percent. Detention and demurrage waived or refunded increased 40 percent between Q2 and Q3 2022. All indices remain substantially higher than their pre-pandemic levels. In dollar terms, the nine carriers have collected roughly $10.1 billon in detention and demurrage charges between April 2020 and September 2022.
The FMC continues to collect these data from the carriers on a quarterly basis and will update the chart and numbers on this website accordingly.