FMC Issues Final Interpretive Rule On Demurrage And Detention

Highlights

• The Federal Maritime Commission (FMC) issued its final "Docket No. 19-05, Interpretive Rule on Demurrage and Detention Under the Shipping Act," effective upon its publication date of May 18, 2020. The Final Rule applies to practices and regulations relating to demurrage and detention for containerized cargo.
• The FMC largely stuck to the language of the Proposed Rule issued in September 2019 — including the FMC's view and application of the "Incentive Principle" — but in response to public comments, the FMC revised and clarified certain provisions.
• The FMC's new framework for detention and demurrage practices has substantial compliance implications for ocean carriers and marine terminal operators — both to evaluate current policies and practices that could potentially be deemed improper, as well as to assess alternative practices better tailored to the new interpretive guidance.