FMC Update: Demurrage, Detention and Data

The supply chain is no stranger to “data initiatives”, some featuring Application Programming Interfaces (APIs), machine learning, and even some artificial intelligence. The problem is that the maritime and surface transportation are all linked up in a physical sense, while the data applications, some of which might be highly sophisticated within a particular transport provider’s realm, are structured differently and simply don’t talk to each other. Formats differ from one competitor to the next.

For example, information on inbound containers from leading carriers (each taking on a different structure) is printed out, or perhaps faxed, and then manually entered into a surface carrier’s list of boxes for pickup. Containers linger, ships stay at anchor…you know the rest. There needs to be a better way. 

In December, 2021, the Federal Maritime Commission (FMC), under the auspices of one its Commissioners, Carl Bentzel, began the agency’s Maritime Transport Data Infrastructure Initiative (MTDI). Besides governmental representatives, that meeting’s presenters included a top executive from Brenntag- well known to those moving chemicals in waterborne trades, and from Vespucci Maritime- a leading analyst of the liner trades. “Hopefully we can set up a better system at U.S. ports…” was an objective expressed by Mr. Bentzel. 

Subsequently, the group has held multiple meetings with industry stakeholders (e.g. drayage truckers- who bemoaned the manual data entry, warehouse operators, and actual cargo interests- the “BCO”s). As noted by the FMC, its MTDI has three key goals: cataloging the status quo in maritime data, storage, and access across the transportation chain; identifying key gaps in data definitions/classification; and developing recommendations for common data standards and access policies/protocols. At end January, the FMC reported that Commissioner Bentzel updated his fellow Commissioners on progress. The agency said that, after the meetings with the various stakeholder groups, the MTDI will hold a “Data Summit” which is tentatively scheduled for June 2022.

But the renewed interest in “Data” at the FMC has been infused into its other initiatives.

Demurrage and detention on boxes not returned to carriers, headline grabbers during 2021, have been the subject of intense scrutiny by the FMC.

In the FMC’s latest information blast (which refers to the same closed door meeting where Commissioner Bentzel offered his review of the MTDI’s progress ), the FMC was looking closely at these issues. The agency notes that: “While commissioners expressed concern about Audit Team data that showed carrier revenues from detention and demurrage charges were up sharply over 2021, Commission staff made clear this is not an unexpected development given record volumes of trade and congestion throughout the U.S. supply chain. Additionally, chassis shortages, insufficient warehouse space, and some shippers abandoning cargoes are contributing to the issuance of detention and demurrage charges.”

They add: “The vast increase in detention and demurrage charges being billed by the carriers is certainly concerning but must be seen in the context of the overall congestion situation at U.S. ports and inland networks. Carriers are also waiving a much higher percentage of detention and demurrage charges…”

But here’s the information part- “best practices” includes data structures and visibility: The FMC also said “As a result of the Team’s initial review of carrier data last year, the Vessel Operating Common Carrier Audit Team urged carriers industrywide to adopt detention and demurrage best practices. Since then, several carriers have restructured the information available on their websites, created streamlined dispute resolution processes, and developed more structured documentation regarding their detention and demurrage policies.”

Looking ahead, the FMC suggests:  “During the closed session, Commission staff provided a brief on a draft Advance Notice of Proposed Rulemaking (ANPRM) that will be presented to the Commission soon. The draft ANPRM would seek comment on whether the Commission should require common carriers and marine terminal operators to include certain minimum information on, or with, demurrage and detention billings.”

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