🇺🇸United States

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

5 verified sources

Definition

Carriers and terminals frequently issue detention and demurrage (D&D) bills late, with incorrect parties, or with insufficient documentation, leading to customer disputes and negotiated write‑offs instead of full recovery. New FMC rules force strict content and timing requirements on D&D invoices; operational and system gaps mean many charges are never billed or are later waived to preserve customer relationships.

Key Findings

  • Financial Impact: $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]
  • Frequency: Daily
  • Root Cause: The 2024 FMC rule requires D&D invoices to be issued within 30 days, to only specific billable parties, and to include detailed shipment data; when TMS and billing systems are not fully integrated with terminal events, charges are missed or issued incorrectly and must be cancelled.[1] High daily fee rates (often $75–$300 per container day and escalating tiers) create strong shipper pushback, leading sales and account teams to grant partial or full waivers when documentation is weak or billing is late.[2][3][6]

Why This Matters

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

Affected Stakeholders

Billing specialists, Accounts receivable clerks, Ocean carrier revenue management, NVOCC operations managers, Freight forwarder finance managers, Terminal operators’ billing teams, Sales/account managers who negotiate waivers

Deep Analysis (Premium)

Financial Impact

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Current Workarounds

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Methodology & Sources

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

Evidence Sources:

Related Business Risks

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]

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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