FMC Change Could Revive Older Detention and Demurrage Claims

By Alexander Whiteman (The Loadstar) –

A potentially significant change at the US Federal Maritime Commission (FMC) has gone largely under the radar, after the regulator confirmed there is no three-year statute of limitations on charge complaints relating to fees assessed on or after 16 June 2022 – leaving carriers exposed to claims that might otherwise have been time-barred.

Charge complaints – a mechanism allowing those holding an interest in affected cargoes to challenge carrier fees deemed unfair – experienced a massive post-pandemic uptick as shippers sought recompense for what they saw as unjust detention and demurrage practices.

As one source active in litigation told The Loadstar, with much of the activity taking place between 2021 and 2023, the statute of limitations was coming up for claims to be lodged before they timed out, meaning the change could prove a blessing, particularly for SMEs.

And yet, outside a few legal circles, little mention has been made of a change that could prevent the expected rush of claims from shippers seeking to lodge cases before the three-year deadline. “From now on, there’s no statute of limitations,” the source said.

They added: “The statute of limitations has always been three years. There’s no statute of limitations on charge complaints now, so presumably in 2032 you could go to something from July of 2022 and go after them for it.”

But ending the statute of limitations is just one part of a far broader push to even out the playing field for SMEs, with the FMC no longer limiting the route through which charge complaints can be made, allowing them to be filed through small claims and formal processes.

While this route had been open to shippers and others looking to bring a claim, those who chose not to follow the specific charge complaint mechanism lost the benefit of the Ocean Shipping Reform Act, in which the carrier had to prove the reasonableness of the charge.

“Now, no matter which route you choose to take, the burden of proof falls with the carrier who must prove that the amount they have charged is legitimate, and they must do that whatever medium the complaint is lodged through,” the source added.

Specialist supply chain law firm Husch Blackwell issued a note suggesting that, given the changes, shippers and NVOCCs review their D&D assessments and “ensure they maintain thorough invoice and bill of lading records to preserve potential claims”.

Sources have told The Loadstar repeatedly over the years that smaller shippers had been forced to make a calculation when it came to the FMC, with the cost of bringing a claim often itself more expensive than what they were ever likely to recoup.

With this latest change, shippers have further evidence that, despite initial expectations that the Trump administration would bow to corporate interests, that appears to be the case only when those interests are waving an American flag.

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