August 27, 2019

Chairman Michael A. Khouri

Commissioner Daniel B. Maffei

Commissioner Louis E. Sola

U.S. Federal Maritime Commission

800 North Capitol Street, N.W.

Washington, D.C. 20573

Dear Colleagues:

It is my privilege to report on the last phase of Fact Finding Investigation No. 28 and to

present my final recommendations as Fact Finding Officer. I recommend that the 

Commission issue an interpretive rule to implement the general guidance contained in my 

Final Report on the application of demurrage and detention charges. I also recommend that 

the Commission establish a Shipper Advisory Board and continue to support the work of 

the Supply Chain Innovation Team in Memphis. 

Since January, we have worked with industry stakeholders to refine the findings and 

recommendations contained in the Final Report. Working with industry leaders 

representing major international ocean supply chain businesses has been a pleasure.

Several of the most knowledgeable ocean carrier, seaport, and marine terminal officials 

have been especially helpful to me as we developed approaches to addressing demurrage 

and detention concerns, and I appreciate their cooperation and advice. 

We also hosted two groups in Washington, D.C., representing ocean carriers, marine 

terminals, ocean transportation intermediaries, truckers, U.S. importers, and U.S. 

exporters to discuss the feasibility of implementing the recommendations in the Final 

Report. The valuable discussions with stakeholders during this phase of the investigation 

gave me confidence that Commission guidance, consistent with the Final Report’s findings,

is advantageous and workable.

I recommend that the Commission issue the attached Notice of Proposed Rulemaking, 

which proposes an interpretive rule that clarifies how the Commission will assess the 

reasonableness of demurrage and detention practices. The rule flows from the longstanding 

principle that practices imposed by tariffs, which are implied contracts by law, must be 

tailored to meet their intended purpose. In the case of demurrage and detention charges, 

the purpose is to act as financial incentives to cargo interests to retrieve cargo and return 

equipment. 
These financial incentives operate to ensure that cargo interests do everything customarily 

required to be positioned to retrieve cargo and return equipment within the time allotted.

Absent extenuating circumstances, however, when incentives no longer function because 

shippers are prevented from picking up cargo or returning containers within time allotted, 

charges should be suspended. 

Focusing on this incentive principle and cargo availability, and supporting innovations such 

as a “push notice” of container availability, will improve port performance and overall 

freight delivery system effectiveness. 

The interpretive rule also includes other factors that the Commission may consider as 

contributing to the reasonableness inquiry. These considerations include the existence, 

accessibility, and transparency of demurrage and detention policies, including dispute 

resolution policies (and related concepts such as clear bills and evidence guidelines), and 

clarified language. 

Also, consistent with my Final Report, I recommend that the Commission establish a 

Shipper Advisory Board to allow us to evaluate the implementation of the Fact Finding No. 

28 recommendations and to obtain the advice of American importers and exporters 

concerning other Commission matters. 

I further recommend that the Commission continue to support the Memphis Supply Chain 

Innovation Team in its efforts to improve the performance of the international ocean 

container freight delivery system.

As I said at the beginning of the Commission’s investigation, my interest in demurrage and 

detention practices is to ensure that the charges are applied in a way that improves the 

fluidity and overall performance of the American freight delivery system. The proposed 

interpretive rule accomplishes this without inhibiting the industry’s ability to craft flexible 

commercial solutions to commercial problems. 

In closing, I would like to thank the Commission staff members whose participation was 

essential to this project. Finally, thanks to you, my colleagues, for your support during this 

effort. 

Sincerely,

Rebecca F. Dye

Commissioner