FIATA Invites Shipping Lines to Adapt Their Demurrage and Detention Charges Amid the COVID-19 Crisis

Recommendation: Cap daily holding penalties at a maximum USD 60 per container per day in high-traffic ports, and USD 30–40 in mid-range hubs, with a 3-day grace period for standard shipments. Publish a uniform rate card by end of next quarter and apply it to all contracted carriers to ensure fairness and predictability for ships.

The council, specialized in freight operations, has conducted an assessment showing average container holds exceeded 4 days beyond free window in peak months, rising to 7–10 days for reefer units under congested conditions. To address, respect least of these constraints and implement a balanced approach that reflects understanding of shifting patterns, and distinguishes small shipments from large volumes, and emergency cargo from routine consignments.

Πρωταρχική υποχρέωση is to publish rules that guarantee transparency: provide each shipper with a clear rate card, and remand disputes to a firm, specialized council-approved mechanism for resolution. Remand process should be efficient and bound by dedicated mtos workflows to avoid ad-hoc penalties, upholding obligation of fair treatment.

Technological integration is essential: adopt automated notices and e-invoicing through MTOS-enabled platforms; ensure port terminals communicate container status within high reliability windows. Primary objective is to make administration practical and efficient to manage, enabling all parties to understand assessment and respecting each other’s obligations and rights. This approach will provide foundation for sustainable, fair handling of holding events and will help this sector, this year and beyond, maintain trust across network.

Practical Framework for Adjustable Late-Container Fees in a Pandemic Context

Adopt a transparent, time-bound adjustment framework tied to available capacity, observed disruptions; implement a simple formula for rate modification; set quarterly reviews using received data from partners, carriers, terminals; this applies to demurrage-like charges.

Process details: baseline rates from pre-crisis data; location-based multipliers; require assessing each request before application; cap with reasonableness limits; rules for remand of disputes; provide contact point list; partners may submit requests via a secure portal; include timeline: 7 days for minor adjustments, 14 days for moderate, 30 days for major disruptions.

Operational steps: ensure available data sources from terminals, customs, carriers; verify data upon receipt; use a rolling assessment to reflect disruptions; apply rate adjustments only after cross-check against location-specific admissibility; require documentation including location, timeline, reasons, and impact assessment.

Risk control: reserve capacity to reduce friction; offer free grace days where feasible for e-commerce shipments; publish a public notification of changes; align with existing rules; monitor impact on partners’ cost structures; track persistence of disruptions; adjust promptly to reflect market conditions.

Data governance: keep available datasets, receipts from terminals, notifications from shippers; run quarterly audits to ensure reasonableness; use a simple assessment tool comparing baseline with current rate, duration, location; secure remand pathway for disputes; maintain contact details for quick replies; require all requests to reference location, timeline, disruptions.

Impact on e-commerce: accelerate approvals for low-risk adjustments; provide clear communication to partners; ensure flexibility remains for free or reduced-fee periods during peak seasons; monitor performance against KPI targets; document case studies recently showing smoother flows under this framework; keep refining rules as disruptions shift; rate assessments stay fair, timely, transparent.

Implementation readiness: secure partner commitment before rollout; designate single contact point for requests; specify required documentation; provide brief training on timing for e-commerce shipments; publish timeline for full adoption.

How to interpret FIATA guidance for recalibrating demurrage and detention charges

Begin by establishing a transparent, fee-based framework for delay-related storage costs that aligns with updated rulemaking and a clear timeline; tie every fee to verifiable cargo handling events and to the line’s operational realities. For shippers and partys, the framework should specify how storage fees vary with actual unload times and observed disruptions, reducing the risk of billed amounts that lack justification. The objective is to avoid overpricing and disputes and to keep flows smooth during disturbances.

Understanding the guidance requires looking at circuit-level practices and what the document refers to as fairness across parties; it calls for alignment with what is available in february updates and aims to avoid unilateral actions that create disruptions, particularly in the context of a pandemic-driven rebound in activity.

Data and evidence drive the logic: collect the number of days cargo sits in storage, the unload time, the line involved, and terminal-specific factors; gather receipts, notices, and other records received from carriers, brokers, and warehouses; ensure availability of primary data before making decisions upon changes.

Reasoning and governance: the updated framework should reflect the decision rules that govern when a storage fee is warranted and how to audit the basis for any extension; consult public rulemaking notes and, where relevant, insights from liskow, to ensure the reasoning aligns with timelines and around standard industry practices.

Drafting specifics: set per-day storage fees within a circuit-specific range and vary by line and port; specify that storage fees apply only after a release request is made or when an unload window passes; ensure the bill reflects only what is truly incurred and documented.

Operational steps: prepare a summary for all parties, publish an updated schedule in february or shortly after, and provide a single version of the revised rules to shippers, carriers, and brokers; use press communications to clarify the approach and prevent misinterpretation.

Monitoring and adaptation: set a mechanism to track disruptions and adjust the framework; gather feedback from persons involved in unloading and storage, and vary the approach as needed to maintain fairness and efficiency.

Data requirements and calculation methods for new charges

Recommendation: adopt a transparent, data-driven framework prior to introducing any fees; require submission of standardized data; publish clear fee schedules; align provisions with contractual clauses; ensure efficient processing to prevent disputes.

Relevant data inputs support accurate determination, reduce risk, protect logistics operations. Source MTOS records, forwarding notes, receipts, notices received from counterparties; ensure data available within thirty days of activity; maintain audit trails; preserve data integrity to avoid disputes.

• Tariff basis: baseline rates, currency, date of effect, scope per service type
• Volume metrics: shipments per period, container counts, weight, forwarding mode
• Holding durations: dwell times, time-in-transit, maximum holding periods
• Cost components: quay/yard storage, equipment usage, labor, customs handling
• Risk indicators: congestion levels, weather disruption, labor shortages
• Communication logs: press notes, calls, notices received, remand requests, responses, available contact points
• Contractual references: relevant clauses, MTOS requirements, standard terms
• Data quality measures: accuracy, timeliness, completeness, auditability
• Dispute handling: status of disputed items, remedies, settlements, escalation path

Calculation approach: follow a step-by-step method ensuring traceability; ensure consistency across all cases. Steps:

1. Baseline rate identification: use standard tariff data, currency, date of effect, scope per service type.
2. Duration factor application: apply using holding durations; compute daily increments beyond threshold.
3. Congestion risk surcharge: apply based on congestion indicators; risk assessment results.
4. Currency conversion: apply prevailing rate; perform rounding to nearest cent.
5. Contractual allowances or caps: apply concessions; respect maximum limits per contract.
6. Finalization and documentation: record final amount; generate receipt; publish updates; retain audit-ready logs.

Governance notes: maintain a change log; reference guidance from Putterman where applicable; allow remand requests within thirty days; log press communications, calls; ensure availability of records for audits.

Customer notification and documentation practices to minimize disputes

Recommendation: Implement a standardized notice within 24 hours after any event impacting turnaround or container status. Include: container number, vessel name, voyage, port, booking reference, gate-in/out timestamps, ETA, expected return date, current status, a fee assessment, contact channel. This approach fosters clearer understanding; reduces liabilities accruing from delayed, inconsistent messaging.

Audits found common gaps in notification timing; these gaps trigger disputes.

• Notification framework: specify where notices go (email; portal). Preferred format (PDF; structured data). Require recipient acknowledgement within 4 hours. Reference covid-19 restrictions only with precise government directives; avoid ambiguity regarding legal obligations.
• Documentation payload: assemble invoice; gate passes; yard move records; container seal status; crane time; dock receipts. Include customer requests. Add covid-19 related restrictions affecting operations such as regional lockdowns or border controls. Ensures claims grounded in specific data rather than assumptions.
• Assessment discipline: use defined fee assessment model with three levels (low, medium, high) tied to objective data points such as dwell time; equipment availability; queue length around terminal. Document how levels influence liabilities; prevents an unexpected charge.
• Dispute handling process: establish a three-step flow: initial review; customer response window; final determination. Provide escalation path. This helps address recurring claims; reduces repeated exchanges.
• Audit trail and update cadence: maintain a timestamped log for every notice, change, or invoice; run periodic checks to identify patterns where disputes recur. Automation acting on validated data improves response times; use insights to improve efficiency well beyond compliance expectations.

Practical example: a small export from japan with a brief terminal window should include a lighter data set; larger cargo movements require full documentation. Ensure invoice details align with customer expectations: itemized fee breakdown, reference numbers, payment terms. Alignment reduces confusion around market expectations, supports quick resolution of claims; addresses potential unexpected liabilities.

Drafting tariff and contract updates: timing, retroactivity, and visibility

Recommendation: implement a phased tariff revision with a fixed start date; define a thirty-day retroactive window; establish a public notice period prior to invoicing. This creates predictable expectations for lawyers involved, workers, managers across network.

Timing discipline requires a single publication cycle; a clear effective date; a post publication grace period to migrate container related fees; keeping a summary of changes. Guidance should specify that revisions apply to invoices issued after retroactivity window, while older invoices remain until window closes.

Visibility rules: publish versioned tariff sheets that specify a line-by-line change; indicate effect on invoiced amounts; supply clients via blogweb with a summary. This increases surrounding transparency; reduces bottlenecks faced during review; mirrors standard guidance in global practice.

Process should involve lawyers involved; map responsibilities; acknowledge bottlenecks; provide an appeal path; ensure reasonableness of adjustment; document financial effect; unload container data; align with infrastructure; provide reasoning here; specify line items invoiced; track global effects.

Monitoring compliance: record-keeping, audits, and handling regulatory inquiries

Set up a centralized, time-stamped registry logging every regulatory inquiry, billing entry, and shipment reference, with access restricted to compliance, legal, and operations teams. This proactive framework yields clearer traceability, reduces liabilities, and supports timely responses across global transportation chains. итоговый источник источник data from internal logs, carrier portals, and partner systems feed the registry to ensure a single source of truth.

Audits: schedule quarterly internal checks; conduct external validation every 2–3 years; retain files for 3–5 years; require a full audit trail showing who did what, when, and why. Use a standardized checklist covering data integrity, access controls, retention, and non-conformities; mandate reasonable corrective actions with deadlines and documented results; archive findings for future reference.

Handling regulatory inquiries: establish a response playbook with templates; target initial acknowledgement within 1 business day; assemble documents from billing records, contracts, and notices; attach to the audit trail; escalate to respective owners when information is incomplete; maintain a clear escalation path to prevent delays.

Data quality and access: integrate data from global carriers, e-commerce platforms, and transportation partners; standardize data fields; implement data lineage and access controls; ensure equipment status and maintenance data can link to inquiries; when equipment is offline, flag and address disruptions proactively.

Roles, responsibilities, and liabilities: define a clear ownership map with a RACI-like model; assign data-entry, validation, and response duties; provide regular training; monitor accuracy, and ensure audit findings are closed; those responsible must demonstrate compliant behavior and take ownership.

Metrics and continuous improvement: track KPIs such as inquiry turnaround time, record completeness, and audit finding closure; publish general trend reports to partnerships and management; analyze whether recent changes are impacting risk, taking corrective actions as needed; until conditions stabilize, maintain tight controls and proactive reviews; address potential disruptions to keep operations smooth.