As part of the Ocean Shipping Reform Act of 2022, the Federal Maritime Commission (FMC) has been investigating supply chain vulnerabilities to create recommendations for greater efficiency and transparency. After extensive interviews and investigation, FMC created a ruling to restrict per diem (detention) and demurrage <link to last blog> billing to contracted parties only. That means demurrage and per diem fees will no longer be shared with third parties but only between the shipping line and the party responsible for the shipping containers. The FMC will release the final rule in Summer 2023.
What does the new FMC rule mean for the logistics industry?
Shippers, 3PLs, and steamship lines (SSLs) will need to adjust to the new rule. The new restrictions will increase security for contractual information about per diem and demurrage billing between the SSL and the owner or responsible party for the shipping container. The rule also provides transparency for shippers and relieves intermodal transportation third parties from having to reconcile per diem charges.
What does the FMC rule mean for drayage and SSLs?
The FMC mention of third parties includes contractors, like those at C&K Trucking, who transport shipping containers from the ports to railyards, container depots, warehouses, or other final destinations. Our contractors may receive invoices for demurrage or per diem if they pick up containers from the port after the last free day. They are then put in the position of reconciling charges, even though they are not privy to the contractual arrangement between the SSL and the owners of the containers they are transporting.
The new FMC rule will allow those in charge of containers (including 3PLs like our sister company, AV Logistics) to communicate directly with supply chain parties and SSLs to reconcile and/or dispute charges more efficiently. It will relieve those who haul shipping containers from the responsibility for reconciling per diem charges. That’s good news for all our contractors at C&K Trucking!
What the FMC rule means for C&K Trucking
C&K Trucking is responding to the new FMC rule with an innovation that will simplify the communication of charges between contracted parties–our Per Diem Reconciliation tool (PDR).
The PDR tool has been in development with our sister company 3PL, AV Logistics, for many months. It dovetails seamlessly into the new FMC rule because it eases communication between SSLs and parties responsible for shipping containers instead of those who haul them, like the contractors at C&K Trucking. The PDR allows contractors and other supply chain partners to effortlessly remit per diem and demurrage invoices for reconciliation or dispute based on the activity of the containers.
The PDR is an enhancement to the Coreviz supply chain visibility tool. The PDR automates the per diem reconciliation process and dramatically reduces the time it takes parties to remit, reconcile, dispute, and receive reimbursement for per diem charges. Here’s how it works:
The PDR will simplify communication between our partners in the supply chain and serve as a central repository for invoices from SSLs and contractors. We will even pay the invoice directly if it helps the cash flow for our customers.
Can our PDR tool help you when the new FMC rule takes effect? Yes! We look forward to helping our customers and contractors operate more effectively by incorporating this tool into their regular operations. To find out more, contact us at 888-209-3524 or email email@example.com.