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FMC Launches Campaign to Ensure Compliance with Regulations on Per-Diem Detention Charges

Mike Schuler
Total Views: 1610
March 23, 2023

Following a landmark decision made by the commission in December of last year, the Federal Maritime Commission (FMC) has launched an active campaign to ensure that ocean carriers and marine terminal operators are following the law.

The FMC has been investigating when per diem detention charges can be billed and has found that charging per-diem when a port is closed and equipment cannot be returned is “unjust and unreasonable.”

Through its Vessel-Operating Common Carrier Audit Program, the FMC has initiated an outreach program to the 11 largest ocean carriers calling in the U.S. to confirm that they are adjusting their demurrage and detention practices in line with the recent decision. Additionally, the commission is contacting marine terminal operators to ensure that they are fully complying with the May 2020 rule (46 CFR 545.5), which clarifies how the commission interprets statutory prohibitions against unjust or unreasonable regulations and practices on receiving, handling, storing or delivering property.

In the recent TCW v. Evergreen case in December, the commission ordered Evergreen to “cease and desist from imposing per diem charges when imposition of per diem charges does not serve its incentivizing purposes, such as when empty equipment cannot be returned on weekends, holidays, and port closures.” The FMC is now taking this decision seriously and working to ensure that all parties involved in the shipping industry are following the regulations and complying with the law.

Established in July 2021, the FMC’s Vessel-Operating Common Carrier Audit Program seeks to ensure that all shipping lines and terminals are operating in a fair and transparent manner. With the FMC’s increased focus on this issue, it is expected that all parties involved in the shipping industry will take note and work towards compliance with the regulations. The FMC’s campaign is a welcome development for those who rely on the shipping industry and the fair treatment of all parties involved.

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