FMC’s final rulemaking on detention and demurrage went into effect May 28. There likely will be a period of adjustment as stakeholders in the shipping industry become accustomed to the new OSRA regulations. While the Federal Maritime Commission (FMC) is responsible for enforcing OSRA, it may take time for all ocean freight carriers to implement the new billing procedures fully.  Here's what you can do:

Be proactive. Familiarize yourself withyour rights and responsibilities under OSRA.

Communicate with your ocean freight carrier partners. Inquire about their compliance planswith the new regulations.

Request compliant invoices. If you receive an invoice missing any of the required information, notify the ocean freight carrier and request a corrected invoice.

This article addresses the most frequently asked questions (FAQs) regarding the new Ocean Shipping Reform Act (OSRA) regulations on detention and demurrage billing for importers, exporters, truckers, and other stakeholders in the shipping industry.

What is detention and demurrage?


Detention refers to the time a container spends outside ofthe port while Demurrage penalty fees are used to prevent containers from beingstored at the port for a long time.

What are some common reasons that result in demurrage fees?


  • Customs clearance delays due to port congestion
  • Incorrect or incomplete documentation
  • Lack of storage space at the terminal
  • Unexpected events like mechanical breakdowns or inclement weather can cause delays in logistical activities within the terminal

What are some common reasons that result in detention fees?


  • Delays in inland transportation
  • Delays in warehouse operations
  • Unexpected events like bad weather, strikes, or natural disasters can delay the return of the container
  • Poor planning and communication between parties involved (shipper, consignee, carrier)

What is the Ocean Shipping Reform Act (OSRA)?


OSRA requires detention and demurrage invoices to be issued only to the contracting party or ultimate recipient, with specific mandated information. Invoices must be issued within 30 days, and billed parties have 30 days to request fee adjustments. Disputes must be resolved within 30 days unless both parties agree to more time.

According to the Federal Maritime Commission (FMC), from2020 to 2022, nine of the largest ocean freight carriers collected $8.9 billion worth of demurrage and detention fees during the COVID-19 pandemic. OSRA was enacted in 2022 in response. Its objective is to reduce shipping costs and address concerns relating to supply chain challenges.

Key Provisions of OSRA are:

  • Billing Parties: Detention and demurrage invoices can only be issued to either the person who contracted for ocean transportation or storage of cargo (Beneficial Cargo Owner (BCO)) or the ultimate recipient of the cargo (consignee). Invoices cannot be sent to multiple parties simultaneously.
  • Invoice Content: Invoices must include specific information mandated by OSRA. Failure to include this information eliminates the obligation to pay the charges.
  • Timeframes: Vessel Operating Common Carriers (VOCCs) and Marine Terminal Operators (MTOs) must issue invoices within 30 days from the last day charges were incurred. Non-Vessel Operating Common Carriers (NVOCCs) must issue invoices within 30 days of receiving the invoice from the VOCC. Billed parties have at least 30 days to request fee mitigation, refunds, or waivers.
  • Dispute Resolution: If a timely filed request is made, the billing party must attempt to resolve the matter within 30 days, unless both parties agree to a longer timeframe.

Under OSRA, what is the minimum information required for invoices?


OSRA requires 13 data elements on detention and demurrage invoices to protect shippers, including container availability date, port, free days, applicable rates, total amount due, and contact information. Invoices must confirm FMC rule compliance and that the carrier's performance didn't cause the charges.

OSRA requires 13 data elements on every detention and demurrage invoice to protect shippers from being wrongfully billed:

  • The date the container is made available
  • Port of discharge
  • The number of containers
  • The earliest return date for exports
  • The number of free days
  • The beginning date for free time
  • The end date for free time
  • The carrier’s applicable detention or demurrage rule on which the daily rate is based
  • The applicable rate or rates per the applicable rule
  • Total amount due
  • Email, telephone number, or other appropriate contact information for questions or requests for mitigation of fees
  • Statement showing charges are consistent with FMC detention and demurrage rules
  • Statement showing common carrier’s performance did not cause or contribute to the underlying invoiced charges

Is there a grace period for billing parties to correct invoices?


No. Billing parties are not permitted a grace period to correct incorrect invoices that fail to meet statutory requirements. While there is no obligation on the billed party to advise of an incorrect invoice, a carrier may reissue the charges on a new invoice that meets the statutory requirements.

What does OSRA mean for BCOs, consignees and trucking firms?


  • OSRA limits the responsibility of paying detention and demurrage charges to the entity that has the direct transportation contract with the ocean carrier or VOCC – most typically a BCO or shipper.
  • A consignee for the container can also become a billed party for a per diem invoice under the FMC rule-making, even if it did not originally contract for ocean freight transportation.  
  • OSRA stops per diem charges from being sent to parties, such as trucking firms, who did not negotiate contract terms for ocean transportation or storage of cargo with the billing party.  

Does the OSRA regulation also apply to rail and/or port storage?


  • Yes. It applies to rail if it’s an intermodal shipment andcontracted by the ocean freight carrier, for example, to move to an inlandlocation.
  • OSRA applies to detention and demurrage charges levied byboth ocean carriers and marine terminal operators.
  • Since port storage charges often involve container detention, they fall under the regulations.

How will OSRA be enforced?


  • The FMC established an interim process for submitting charge complaints and has hired additional staff to investigate complaints.
  • As of May 10, 2024, the FMC is in the process of creating an interim “one-stop” website for submission of comments, complaints, concerns, and requests for investigations to serve as a bridge while a longer-term product is developed.

Can a trucking firm, broker or intermediary party still pay the detention and demurrage charges on behalf of a contracting party?


The OSRA regulations do not specify who is responsible for paying the charges. However, they have clarified who could be billed. If the BCO is billed, they can choose to involve a broker in the payment process, but the ultimate responsibility for paying the charges lies with the BCO.

If an ocean freight carrier sends detention invoices directly to the trucking firm, should the Beneficial Cargo Owner (BCO) or the consignee request the SSL to send the invoice to them instead?


  • Yes. Under OSRA, the invoice should be sent to the party who contracted for the transportation or storage, usually the Beneficial CargoOwner (BCO) or the consignee.
  • If you are the BCO and the ocean freight carrier is sending invoices to the trucking firm, technically this means the invoice isn’t valid and shouldn’t be paid.
  • Only invoices sent to the right party are valid.

What does Earliest Return Date (ERD) mean and what is the process to return an exported container?


The Earliest Return Date (ERD) is when an exported container must be returned to the port. Terminals verify containers but don't handle inland transport; this is the trucker's responsibility. The process involves the shipper packing the container, the terminal verifying it, and the carrier issuing a bill of lading with the ERD.

The Earliest Return Date (ERD) specified in the invoice indicates the date by which the exported container must be returned to the designated location, typically the port or container yard.

The terminal itself is not involved in the inland transportation or responsible for meeting the ERD. Their role is to receive, store, and verify the container's condition before and after the ocean voyage.

Once the container is loaded and leaves the terminal, the responsibility for returning it by the ERD falls on the trucker or whoever contracted the inland transportation.

The typical process to return a container is:

  • The shipper or exporter packs the container and arranges inland transportation to the port terminal.
  • The terminal receives the container and verifies its condition.
  • The SSL or NVOCC issues a bill of lading (BOL) acknowledging receipt of the container and initiating the ocean transportation. The ERD may be noted on the BOL or a separate document.

Is the ocean freight carrier required to provide documentation that their bills are accurate?


Yes. OSRA mandates that invoices include specific information to demonstrate compliance with the regulations. You are not obligated to pay the charges if any required information is missing. Failure to include the required information on a demurrage or detention invoice eliminates the billed party's obligation to pay the applicable charge.

The ocean freight carrier bills demurrage to a BCO. Does the BCO also need to pay storage to rail carrier and the port directly? Do they have to pay both the carrier and the terminal?


You may be billed for both demurrage by the carrier for exceeding free time at either or both the port and the terminal.

Will the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) be removed from the dispute and arbitration process after May 28? If so, will the FMC be the point of contact for disputes?


The UIIA may still be used in disputes, but OSRA establishes a minimum timeframe for billing parties to address disputes. If you are unable to resolve the issue with the billing party within the timeframe, you can file a charge complaint with the FMC.

Does demurrage need to be paid before a shipper can attempt to pick up the import container after 5/28?


Not necessarily. OSRA prohibits VOCCs from withholding cargo solely due to unpaid demurrage charges if the invoice is not compliant. They also can require “payment upon receipt” for demurrage. However, unpaid demurrage charges may accrue further.

Can ocean freight carriers still prevent trucking firms from picking or returning carriers due pending invoices before 5/28?


The OSRA regulations, effective May 28, 2024, prohibit VOCCs from taking any action to prevent cargo pick-up or container return due to unpaid detention or demurrage charges if the invoice is not compliant with the new requirements.