FMC audit team reports detention and demurrage billed down toward pre-pandemic levels; disputes remain steady

Federal Maritime Commission staff updated commissioners on the agency's vessel-operating common carrier audit program, saying recent data indicate detention and demurrage billing has moderated from pandemic peaks and that the audit team will pursue continuing voluntary information exchanges with carriers and marine terminal operators.

"Between the second quarter of 2020 and the fourth quarter of 2023 approximately $17 billion in demurrage and detention was billed, of which $14 billion was collected and $2.6 billion was refunded," Jason Guthrie, an analyst with the Bureau of Trade Analysis on the audit team, told the commission.

Guthrie said fourth-quarter 2023 data suggest billing and collection returned toward pre-pandemic levels, but staff cautioned detention and demurrage remain an ongoing concern. The audit team also reported that the number of lockouts (denials of access to pick up containers for nonpayment) declined for a third straight quarter and that reported booking cancellations averaged about 1% for carriers in the dataset.

Tara Neelen, part of the audit team, said dispute filings over detention and demurrage charges have been relatively flat across recent quarters and that the number of disputes resolved roughly matches new disputes in the latest data, suggesting carriers are keeping pace with customer complaints.

"The spirit of the audit program is voluntary exchange of information and relationship building with carriers and terminals," the managing director leading the audit briefing said. The program was expanded in 2023 to include marine terminal operators and focuses on best practices, compliance and dialogue rather than automatic enforcement; staff told commissioners that if the program detects shipping-act violations it will refer matters to enforcement.

Commissioners and staff noted the newly effective final rule on detention and demurrage billing may further reduce excessive charges, and staff indicated they plan follow-up meetings with carriers and terminals in late summer and early fall. The commission moved to a brief recess so public participants could depart and so staff could discuss proprietary audit details in a closed session.