May 11, 2020 Practice Points

U.S. Federal Maritime Commission Issues New Guidance on Demurrage and Detention Practices

This rule was the result of many months of investigation and rulemaking on the part of the FMC.

By David Y. Loh

On April 28, 2020, the Federal Maritime Commission (FMC) issued its “Interpretive Rule on Demurrage and Detention under the Shipping Act,” which will become effective once it is published in the Federal Register. The timing of the rule is particularly prescient in light of the COVID-19 pandemic and associated decrease in container volume to and from the United States. Before explaining the rule’s significance, we should explain the purpose of the FMC and the power by which it operates. The overall purpose of the FMC is to promote and protect the maritime industry throughout the United States. To that end, the FMC regulates the industry to encourage fair and reasonable practices, especially as it relates to the activities of ocean carriers, marine terminals, and ocean transportation intermediaries (such as freight forwarders and non-vessel owning common carriers, also known as NVOCCs).

Premium Content For:
  • Litigation Section
Join - Now