Mastering the Art of Filing Demurrage Claims with Ocean Carriers

Effective January 2025, the updated Standard Operating Procedures (SOP) for Filing Demurrage Claims offers exporters, shippers, and BCOs (Beneficial Cargo Owners) a structured framework for managing billing discrepancies, operational delays, and disputes with ocean carriers. This guide is a must-read for anyone navigating the complexities of detention and demurrage fees.

Key Highlights of the SOP

• Purpose: Empower shippers to standardize their claims process, improve outcomes, and maintain regulatory compliance.
• Scope: Applicable to billing errors, operational delays, and disputes related to carrier charges.
• Principles: Always file claims, regardless of size, to maintain a track record with carriers and ensure accountability.

Filing a Claim: Step-by-Step Process

1. Review the Invoice: Ensure all fields meet FMC requirements (e.g., free time, daily rates, total charges).
2. Gather Documentation: Collect invoices, Bills of Lading (BOL), and Equipment Interchange Receipts (EIR).
3. Draft the Dispute: Use a structured letter to highlight discrepancies and provide evidence.
4. File the Dispute: Submit via designated channels within 30 days post-invoice.
5. Monitor the Claim: Track timelines and escalate unresolved cases.
6. Escalate if Necessary: Engage legal counsel or file complaints with the FMC for persistent issues.

For detailed instructions, refer to How to File Demurrage Disputes with Ocean Carriers.

Instructions for Filing Demurrage Disputes

Reviewing the Invoice

The FMC Final Rule mandates that invoices include specific information to ensure transparency. Exporters must verify:

• Date container was made available.
• Free time allocation (start and end dates).
• Rates for detention or demurrage.
• Compliance statements confirming the carrier’s performance did not contribute to charges.

Tips for Success

• Cross-check all dates with terminal schedules.
• Flag discrepancies in container availability or status.
• Incomplete invoices may not be enforceable—highlight any missing fields.

Preparing Dispute Documents

Thorough documentation strengthens your case. Ensure you include:

1. Annotated invoices highlighting discrepancies.
2. Terminal gate records and EIRs.
3. Vessel schedules showing delays.
4. Proof of free time entitlement.

For guidance on creating well-organized submissions, see Instructions for Annotating Invoices.

Get our free Checklist for Filing Demurrage Claims.

Dispute Letter

Drafting an effective dispute letter is critical. This template ensures clarity and professionalism:

Subject: Dispute for Invoice #[Invoice Number], Container #[Container Number(s)]

Details:

• Charge Description: E.g., demurrage fees, detention fees.
• Amount Disputed: Specify the amount in question.
• Reason: E.g., incorrect free time calculation, delayed availability.

Attach all supporting documentation and provide a clear timeline for resolution, typically 30 days.

Download the full dispute letter template by clicking the button below:

Instructions for Annotating Invoices

Proper annotations provide a clear roadmap for identifying errors.

Key Steps for Annotations

1. Header Review: Verify carrier details, invoice number, and customer information.
2. Container Details: Confirm container number(s) and port of discharge.
3. Free Time and Charges: Cross-check start and end dates, daily rates, and total charges.
4. Regulatory Compliance: Ensure FMC compliance statements are included.

Pro Tip: Use color-coded highlights and numbered notes for clarity.

For detailed instructions, refer to Instructions for Annotating Invoices

Appendix D: Resolution Timeframes and Significant Monetary Value

Understanding FMC timeframes is crucial for managing disputes effectively:

• Invoice Issuance: Carriers must issue invoices within 30 days.
• Dispute Submission: Shippers have 30 days post-invoice to file disputes.
• Resolution Timeline: Carriers must resolve disputes within 30 days of submission.

What Constitutes Significant Monetary Value?

While no specific threshold is defined, shippers should prioritize disputes that significantly impact their bottom line.

By adhering to these timelines, exporters can ensure compliance and timely resolution.