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Wan Hai settles detention and demurrage (D&D) claim as FMC tightens its grip on carrier procedures
Posted on May 16, 2022 |
- Demurrage is the charge that the merchant pays for the use of the container within the terminal outside the free time period and detention is the charge that the merchant pays for the use of the container outside of the terminal or depot, beyond the free time period.
- Containers are either owned or are leased by shipping lines that provide them to their customers (shippers or merchants) for the safe and fast door-to-door transport of their goods.
- It is crucial for shipping lines to turn around their containers as fast as possible but if they don't or fail to do it, shipping lines prevent merchants who exceed their free time by charging demurrage and detention fees.
- The FMC charged a penalty of $850,000 against Wan Hai on May 7 regarding disputed D&D charges on 21 containers, making it the 2nd carrier to settle a D&D claim following Hapag-Lloyd‘s fine of $822,220.
- The new information demanded by the Federal Maritime Commission’s (FMC) Bureau of Trade Analysis (BTA) Newly mandated information will provide the BTA insight into the pricing of individual trade lanes and by container and service type it will provide more immediate information regarding capacity management decisions of ocean carriers and alliances.
- Each carrier within an alliance will have to submit pricing information on cargo moved on major trade routes.
- However, in the new requirements, there are some complaints from US shippers and forwarders over possible antitrust breaches by carriers as well as denial of service charges, which the FMC is investigating.