🇺🇸United States

Delayed cash collection due to contested D&D invoices

3 verified sources

Definition

Detention and demurrage bills are frequently held up by customers who dispute the charges or request mitigation within the 30‑day window, delaying payment and extending days‑sales‑outstanding on these ancillary revenues. While the cargo is often already released, the D&D component sits in A/R as ‘in dispute’ for weeks or months.

Key Findings

  • Financial Impact: $20,000–$200,000 in outstanding D&D receivables at any given time for medium carriers/NVOCCs (scaled from high per‑day fees and the 30‑day mitigation window plus negotiation cycles)[1][2][3]
  • Frequency: Monthly
  • Root Cause: Under FMC rules, invoices must be sent within 30 days and billed parties have 30 days to request fee mitigation; carriers must then attempt to resolve within a further 30 days.[1] Each step introduces structured delay; disputes over free‑time entitlement, terminal congestion, and responsibility for delays keep amounts open, and many shippers refuse to pay D&D until reconciled, slowing cash conversion.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Freight and Package Transportation.

Affected Stakeholders

Accounts receivable managers, Credit & collections teams, Carrier and NVOCC finance managers, Customer accounts/payables teams at shippers, Legal/compliance for escalated disputes

Deep Analysis (Premium)

Financial Impact

$20,000–$200,000 in 3PL D&D disputes; resolution extends 90–120 days; 3PL disputes cascade to shipper • $20,000–$200,000 in 3PL receivables in limbo; 3PLs weaponize disputes to delay their own payment; resolution cycle 90–120 days • $20,000–$200,000 in A/R + unrecovered margin from undiscounted write-offs

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Current Workarounds

AR Collector creates multiple email chains, cc's Billing, tracks responses manually, updates aging report weekly, calls 3PL for payment status • AR Collector escalates to Operations for terminal printouts, compiles PDF evidence package, sends via email, follows up bi-weekly • AR Collector manually receives dispute email, logs in shared spreadsheet, adds to aging report, sends reminder emails every 5 days

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Systemic under‑billing and billing‑error write‑offs on detention & demurrage

$50,000–$500,000 per year for mid‑size shippers and NVOCCs (extrapolated from typical fee levels of $75–$300 per container per day and hundreds–thousands of annual containers)[2][3][6]

Runaway detention & demurrage fees from poor coordination

$150,000+ per incident for large shipments, with total annual D&D costs often reaching hundreds of thousands of dollars for active importers/exporters (illustrated by demurrage examples where a single shipment incurs $150,000 in charges)[5]

Disputed detention & demurrage charges and rework

$5,000–$50,000 per month in staff time and concessions for a mid‑size forwarder or carrier (inferred from FMC‑mandated 30‑day dispute/mitigation process windows and typical per‑day charge levels)[1][2][3]

Loss of equipment and terminal capacity from prolonged container time

Opportunity cost equivalent to losing multiple container turns per year per unit; with daily detention fees often only $50–$100, lost revenue from missed trips can exceed fee income by thousands of dollars per container annually[3][5]

Regulatory exposure and penalties over non‑compliant D&D billing

Individual FMC enforcement actions can reach into the millions of dollars in refunds and penalties across billing categories; D&D is a specific focus post‑OSRA‑2022 (risk level inferred from the Act and rule‑making focus on billing fairness).[1]

Opportunistic use of D&D as de‑facto storage or leverage

Tens of thousands of dollars per year in avoidable D&D per abusing shipper, plus significant opportunity cost for carriers whose equipment is tied up (estimated from fee ranges of $75–$300 per day and observed patterns of extended dwell)[2][3][6]

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