Port Terminals’ New Incentives Could Ease Truckers’ Demurrage and Detention Costs

Time for new “incentives”: Port terminal operations could help truckers with demurrage, detention

Motor carriers are once again facing responsibility for demurrage and detention charges, ending a break that lasted just over a year. The change has renewed concerns among port drayage carriers that they can be billed for delays they did not cause and may have little ability to resolve directly.

The dispute centers on who may be billed for charges assessed by ocean carriers when containers remain at terminals or in a trucking company’s possession beyond the allowed free time.

Demurrage generally applies when a loaded container remains at a marine terminal beyond the permitted period. Detention applies to the use of the carrier’s equipment outside the terminal, including the time needed to pick up a container, unload it and return the empty equipment.

Free time varies by carrier, terminal and equipment type. Robert Loya, CEO of the Harbor Trucking Association, has cited four days for dry containers and two days for reefers in the context of the current port disputes.

Under the Ocean Shipping Reform Act of 2022, the stated purpose of demurrage and detention was to create an incentive for cargo to move within those free-time windows. The charges were intended to apply to parties responsible for failing to move cargo promptly, while encouraging terminals, ocean carriers and other participants to reduce congestion.

For trucking companies, however, the system can produce charges even when the trucker cannot obtain an appointment or access the container.

That problem was highlighted by recent outages involving the eModal appointment system, operated by Cargo Sprint and used by terminals along the West Coast. The outages affected terminals in the Los Angeles-Long Beach area, Oakland and Seattle, according to Loya. The disruption prevented some carriers from scheduling pickup appointments even as the free-time clock continued to run.

“We’re not the creators of the problem,” Loya said of the trucking companies affected by the outage. He questioned why terminal operators could not advocate with their ocean-carrier customers for adjustments to the fee schedules when appointment systems fail.

The issue is not limited to technology outages. Port closures, labor disruptions, restricted terminal access and problems with container availability can also prevent a trucker from completing a move within the allotted time.

When that happens, carriers may dispute the charges with the ocean carrier. The process, however, can take place after the charges have already accumulated. Some ocean carriers require the full amount to be paid before considering a dispute through a separate resolution process.

That leaves motor carriers in a difficult position. They may have to pay an invoice first, gather records showing that the container was unavailable or inaccessible, and then wait for a decision. Loya described the process as one in which carriers are effectively “guilty until proven innocent.”

The Federal Maritime Commission has addressed the question of who can be billed. The commission previously clarified that demurrage and detention charges should be billed only to parties with a contractual relationship with the ocean carrier. Those parties generally understand the applicable terms and are in a position to challenge improper charges.

That clarification created concern among ocean carriers. The World Shipping Council, which represents major ocean carriers, challenged the rule. Following that challenge, motor carriers are again responsible for demurrage and detention fees, ending the temporary protection that had kept them from being billed directly.

The change matters because trucking companies often are not parties to the ocean carriage contract that establishes the free-time terms. They may be hired only to perform the inland movement, yet still face financial consequences when a terminal appointment system fails or a container is not available.

Documentation is central to any dispute. Records showing when a container was discharged, when it became available for pickup, when an appointment was requested and when the truck entered or left the terminal can help establish whether the free-time clock was applied correctly.

If an invoice states that free time began on one date but the container was not actually available until several days later, those timestamps may support a request for an adjustment. The FMC has issued guidance on information that should appear on demurrage and detention invoices and on who may be billed.

Tracking free time across multiple carriers and ports can be difficult when done manually. Automated systems are increasingly used to monitor carrier-specific terms, record milestone events and alert freight teams before charges begin. For trucking companies, the same records can provide evidence when a charge is tied to a terminal or appointment problem rather than a failure to move the cargo.

Industry discussions have included possible changes to how free time is measured, including the use of working days rather than calendar days. Supporters say working days would better reflect when terminals can be used. Opponents argue that such a change could shift pressure to ocean carriers or lead to shorter free-time periods. Other proposed measures focus on transparency, simpler billing and clearer responsibility among terminals, carriers and cargo interests.

For now, the responsibility for avoiding or disputing the charges remains divided among the parties involved in an ocean shipment. The bill of lading governs the movement of the cargo, and shippers or consignees generally remain responsible for demurrage and detention under that contract. Motor carriers, meanwhile, may still become directly involved when ocean carriers issue charges tied to the inland movement.

The recent appointment-system outage has renewed calls for a fairer process. Loya said the Harbor Trucking Association is working with other groups to seek oversight hearings, arguing that terminal operators and ocean carriers should share more responsibility when their systems prevent cargo from moving.

For port truckers, the central concern is straightforward: A fee designed to encourage movement should not continue accumulating when the trucker cannot access the container or obtain an appointment. Until billing rules and dispute procedures better account for those situations, motor carriers will continue to carry both the operational burden and the financial risk.