Billed party: who is responsible for demurrage charges

“Who is responsible for demurrage charges” has two answers that get confused with each other: who the carrier may send the invoice to, and who ends up carrying the cost. They are settled by different documents, and for eighteen months one of them had a regulation behind it.

The definition, and it is narrower than it looks

In the US billing rule the term is defined in one sentence:

Billed party means the person receiving the demurrage or detention invoice and who is responsible for the payment of any incurred demurrage or detention charge.

Note what that does. It ties receiving the invoice and owing the money together in a single definition, which is why the rest of the rule spends its time on what the invoice has to prove rather than on who may be sent one. The counterpart, the billing party, is the ocean common carrier, the marine terminal operator or the NVOCC that issues it.

The rule that used to name the parties is gone

Until 29 December 2025, 46 CFR § 541.4 said a properly issued invoice was one issued to the person who contracted with the billing party for the carriage or storage, or to the consignee. Having invoiced the first, it said, a billing party “cannot also issue a demurrage or detention invoice” to the second. It closed with a flat sentence: “A billing party cannot issue an invoice to any other person.”

The World Shipping Council challenged the rule, and on 23 September 2025 the D.C. Circuit held that this one section

is arbitrary and capricious because the Commission failed to explain the seeming inconsistency between its contractual-privity-based rationale and its categorical bar against billing motor carriers even when in privity with the billing party

The court severed and set § 541.4 aside. The Commission then removed it from the Code of Federal Regulations by final rule, effective 29 December 2025, noting that “the other provisions of the rule remain in effect”. The section now reads [Reserved].

So an explainer written in 2024, and a good many of them are still online, tells you there is a rule about who may be billed. There is not.

What survived, and it is the useful half

The invoice still has to justify itself. Under § 541.6(a), the identifying information on a demurrage or detention invoice must include the bill of lading number, the container number, for imports the port of discharge, and:

The basis for why the billed party is the proper party of interest and thus liable for the charge

And § 541.5 states the consequence of leaving out any required field in one line: it “eliminates any obligation of the billed party to pay the applicable charge”. The question “why me?” is therefore not a complaint. It is a field, and a missing field is an answer.

Two further paragraphs matter when the invoice lands on the wrong desk. An NVOCC can be both billing and billed party on the same charge, and where its own customer disputes, it gets a further thirty days to pass the dispute up. And under § 541.7(d), where the billing party has invoiced an incorrect person it may bill the correct party only within thirty calendar days from the date the charge was last incurred, so an invoice redirected to you weeks later is worth dating before paying. The rest of the required fields, and the arithmetic they are meant to let you reproduce, are on the demurrage invoice entry.

Outside US trade there is no definition at all

In India, the UAE, Singapore and most other jurisdictions, who owes a demurrage charge is whatever the contract of carriage and the custodian’s tariff say, read together with the “merchant” definition in the bill of lading, which is usually drawn wide enough to catch the shipper, the consignee, the holder of the bill and anyone acting on their behalf. There is no required field, no thirty-day issuance clock and no rule that the invoice explain itself. The practical consequence is that the record you keep is the only record there is.

What those tariffs use instead of a definition is a description. Outside the United States the party a charge lands on is routinely named as the beneficial cargo owner, or the beneficial cargo interest, and no shipping regulation anywhere defines either phrase. Patrick’s Australian dangerous-goods schedule moves its surcharge off the shipping line and onto the “Beneficial Cargo Interest” at the moment free time expires, which is a liability transfer written into a tariff rather than into a rule.

The distinction that decides who pays in the end

Liability to the carrier and responsibility for the delay are different things and the paperwork rarely lines them up. The invoice arrives at the importer because the importer is on the contract of carriage. The reason it arrived is usually that a document was late, and documents are late because a party who owes you nothing sat on one.

The Federal Maritime Commission’s own interpretive rule is explicit about what the charge is for:

the extent to which demurrage and detention are serving their intended primary purposes as financial incentives to promote freight fluidity

An incentive aimed at a party who could not move the box is the argument in every demurrage dispute, and it is an argument made of dates: when the container became available, when the pack was complete, whom you chased and when. Document packs routinely run about eight days late against free time, and a week of demurrage on one container has cost US$12,000, which is why the record matters more than the rulebook.

That record is not something a desk assembles after the invoice arrives. It is the by-product of having chased the pack in the first place, which is the job demurrage and detention software that names the liable party should be doing: every request, every reply, every date, against the container the charge will eventually be raised on. When the invoice comes and its stated basis for your liability is thin, you are answering with a file rather than with a recollection.