What is happening: The FMC have announced they will standardize the language used in detention and demurrage fees after recommendations by commissioner Rebecca Dye.
When is this happening: The FMC voted to move forward with the recommendation on December 7, 2018. Language will be standardized in early 2019.
Who will do it: Language will be standardized by a set of Innovation Teams made up of private sector stakeholders.
Option One: The first option to achieve this is by recognizing detention charges as fees applied to the container use. Demurrage fees would be for use of terminal land/space.
Option Two: Detention fees would apply for container use outside of terminals. Demurrage would be for terminal space and the equipment within.
What did the press release from the FMC say: “The investigation found that demurrage and detention charges can incentivize cargo to move expeditiously and that standardizing practices for when these fees are levied would improve velocity at ports.”
What did the final report say: “As the Interim Report explained in some detail, industry terminology is not used consistently by carriers and marine terminal operators, which may cause confusion. The only question going forward is how to define the terms at issue and how to implement standardization.”