On May 28, 2024, the Federal Maritime Commission’s (FMC) final rule on demurrage and detention (D&D) billing practices went into effect. This rule represents a significant regulatory development aimed at increasing transparency, accountability, and fairness in how D&D charges are assessed and disputed. The new rules implement the requirements provided in the Ocean Shipping Reform Act of 2022.

The new regulations — codified at 46 C.F.R. Part 541 — directly impact the invoicing processes for ocean common carriers, marine terminal operators, and non-vessel-operating common carriers (NVOCCs). Entities that fail to comply with these invoicing requirements risk losing the right to collect D&D charges altogether.

Overview of the Final Rule

The rule establishes:

• Minimum required invoice content, including bill of lading and container numbers, dates related to free time and availability, rates, contact information for disputes, and required certifications.
• Strict invoicing time frames with invoices required to be issued within 30 calendar days of the last date charges were incurred.
• Limitations on who may be billed, ensuring that only the party with a direct contractual relationship or the consignee may be invoiced (note that the rules define “consignee” as the “ultimate recipient of the cargo” and not as merely the entity listed in the consignee box on the bill of lading).
• Dispute resolution procedures, mandating that billing parties allow at least 30 days for dispute submissions and respond within 30 days.
• A penalty for noncompliance, providing that invoices missing any required information are deemed invalid and unenforceable.

Three Action Items for NVOCCs

1. Update Your Rules Tariff To Preserve Your Rights

The new regulations require precise alignment between a party’s tariff provisions and its invoicing practices. NVOCCs must ensure that their rules tariffs:

• Specify how and when D&D charges may be passed through to customers.
• Reference the FMC-compliant dispute resolution process.
• Ensure that outlays and refunds of D&D can be paid and received from their customers.

Failure to include these provisions may compromise your ability to enforce payment or recover costs.

2. Review and Modify Your Invoicing Procedures if You Issue Your Own D&D Invoices

For NVOCCs that are not simply passing through D&D invoices, your internal billing systems must now:

• Track the 30-day invoicing window accurately.
• Populate invoices with all required data points, including the container availability date, free time periods, specific D&D charge dates, and certifications of compliance.
• Enable digital dispute channels and include direct contact information for handling invoice questions.

3. Prepare To Handle Disputes Strategically

The rules offer a structured dispute process: billed parties have 30 days to challenge charges, and billing parties must respond within 30 days. This creates a tight timeline that requires NVOCCs to:

• Develop or revise dispute workflows.
• Train staff on how to flag improperly issued invoices to ensure improper invoices are not paid (e.g., issued to the wrong party or missing required elements).
• Inform billing parties when charges are under dispute, triggering the additional 30-day resolution window under § 541.7(c).