🇺🇸United States

Disputed detention & demurrage charges and rework

3 verified sources

Definition

Inaccurate or poorly documented D&D assessments lead to recurring disputes, requiring significant back‑and‑forth, re‑calculation, and occasional refunds or credits to customers. Disputes delay cargo release and damage service quality, often forcing logistics providers to absorb some charges as a form of service recovery.

Key Findings

  • Financial Impact: $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]
  • Frequency: Weekly
  • Root Cause: OSRA‑2022 and subsequent FMC rules require highly detailed D&D invoices (including container numbers, time period, and rate calculation) and give billed parties 30 days to seek mitigation, refunds, or waivers.[1] When timestamps, free‑time entitlements, and stop/start events are tracked in spreadsheets or siloed systems, discrepancies appear; customers challenge invoices based on conflicting data, forcing re‑work and partial write‑offs.[1][2][3]

Why This Matters

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

Affected Stakeholders

Customer service teams at carriers and NVOCCs, Dispute resolution and claims analysts, Billing and AR teams, Shippers’ logistics coordinators, Legal/compliance staff handling FMC‑related disputes

Deep Analysis (Premium)

Financial Impact

$1,000–$4,000 per month in missed delivery windows, customer complaint handling, and rescheduling labor; 2–5 customer complaints per week related to 'unexpected delays'; 3–8% customer churn attributed to delivery reliability • $1,000–$4,000/month in overhead (small volume) • $10,000–$40,000/month in preventable demurrage (bulk shipment, high impact)

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Current Workarounds

3PL Billing Specialist maintains separate Excel file per customer; manually reconciles against carrier's portal (if available); disputes via email with carrier • Accounts Receivable Collector manually retrieves billing records, calls Billing Clerk for documentation backup, negotiates payment terms via email, places invoice on hold pending dispute outcome, manually updates customer account notes • Billing Specialist maintains detailed Excel audit file; stores all terminal communications in email folder; manual trace-ability

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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]

Delayed cash collection due to contested D&D invoices

$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]

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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