Statement by Commissioner Carl W. Bentzel on Commission Vote on Demurrage and Detention and Notice of Proposed Rule Making
Last week, the Commission voted to potentially consider further industry guidance on reasonable practices governing the issuance of demurrage and detention charges. Specifically, FMC staff was charged with the development of an Advanced Notice of Proposed Rulemaking (ANPRM) that would seek industry views on whether the Commission should require common carriers and marine terminal operators to include certain minimum information on or with demurrage and detention billings and adhere to certain practices regarding the timing of demurrage and detention billings. The Commission effort in this area is significant given the recent controversies over the scale of imposition of penalties for both demurrage and detention, and congestion related transportation failures.
I am pleased to have voted for staff proceeding with this ANPRM to move forward, and to support the recommendation of Commissioner Dye in Fact Finding-29 and believe that it is of utmost importance to expeditiously submit this proposal for public review. I believe that the Commission needs to provide clear and firm guidance on the assessment of demurrage and detention penalties in light of current levels of congestion, and growing shipping frustration. Additional clarity will also assist FMC enforcement of potential violations of the Shipping Act.
I look forward to working with FMC staff, my fellow Commissioners, and considering comments submitted through the public review process. Demurrage and detention charges when properly utilized are intended to work to incent the movement of cargo by limiting the amount of time available for the pick-up of cargo, and the retrieval of cargo equipment in order to maintain traffic fluidity. Carriers and marine terminal operators should not be charging demurrage or detention caused as a result of their own operational challenges, but on the other hand, shippers also need to pick up cargo left on-dock on a timely basis. While this clearly a delicate balance, I believe that we should move forward to consider new standards for the imposition of demurrage and detention.
Carl W. Bentzel is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.