Service contract: the free time nobody can look up

A desk that has ever tried to confirm its own free time has run into this word. The forwarder says four days, the tariff says seven, and somebody mentions that “it’s in the service contract”, at which point the trail stops, because a service contract is the one document in the chain that nobody outside your company is allowed to show you.

That is not a filing habit. It is the statute.

What it is

US law defines a service contract as “a written contract, other than a bill of lading or receipt,” between one or more shippers and an ocean carrier, in which two commitments meet:

• you commit to “a certain volume or portion of cargo over a fixed time period”, and
• the carrier commits to “a certain rate or rate schedule and a defined service level, such as assured space, transit time, port rotation, or similar service features.”

So it is a volume-for-rate trade with a service promise attached, and the thing it is explicitly not is a bill of lading. The bill is issued per shipment and evidences the carriage of that cargo. The contract sits above it and governs a year’s worth of them.

Nine essential terms, four of them public

Each service contract “shall include” nine essential terms:

The contract itself “shall be filed confidentially with the Federal Maritime Commission.” What reaches the public is narrow and the statute names it precisely: “a concise statement of the essential terms specified in paragraphs (1), (3), (4), and (6) of subsection (c) shall be published and made available to the general public in tariff format.”

Read the right-hand column again. Lanes, commodities, volume, duration. Not the rate, not the service commitment, not the damages.

And free time is not on the list at all

This is the part that decides what any piece of software can honestly tell you. Free time, demurrage and detention appear nowhere among the nine essential terms. A service contract may carry them, and most do, but no law requires it to, and nothing requires the figure to be published.

Compare that with the carrier tariff, where the opposite is true in every respect. A tariff must be kept “open to public inspection in an automated tariff system,” must be “made available electronically to any person, without time, quantity, or other limitation,” and must “state separately each terminal or other charge … and any rules that in any way change, affect, or determine any part or the total of the rates or charges.” Free time is exactly such a rule, which is why a tariff figure is a lookup anyone can do.

The practical consequence, and it is worth being blunt about it: if your free time lives in a service contract, the only copy of the number is the one your own company signed. No vendor has it. No API returns it. A product that resolves “your” free time from a public source has resolved the tariff fallback, which is the figure that applies when you have no contract, and a desk that negotiated five days and counts seven will discover the difference on an invoice.

This is why the port pages on this site publish terminal storage tariffs and leave the carrier column empty until a real, sourced row exists. One of the two is a published document. The other is yours.

Two asymmetries worth knowing

Rate changes move in one direction slowly. In a tariff, an increase “may not become effective earlier than 30 days after publication,” though the Commission may allow it sooner for good cause; a decrease “may become effective on publication.” A desk on tariff rates therefore gets a month’s warning of a rise and none of a fall. A desk on a contract gets neither, because it has the rate it signed for the duration it signed, which is most of the reason to have one.

A terminal’s schedule binds you without your having read it. The same chapter says a marine terminal operator “may” publish a schedule of its rates and practices for receiving, delivering, handling or storing property, and that any schedule it does publish “is enforceable by an appropriate court as an implied contract without proof of actual knowledge of its provisions.” Three documents, three legal temperatures: the terminal schedule is voluntary but binding on sight, the carrier tariff is compulsory and public, and the service contract is compulsory to file and private to read.

The nonperformance clause nobody reads until it bites

Essential term eight is “the liquidated damages for nonperformance, if any.” You committed to a volume. If the volume does not ship, whether through a cancelled programme, a supplier who could not load or a quarter that went quiet, the contract may price the shortfall, and liquidated damages are not a penalty you argue down after the fact but a figure both sides agreed in advance.

The “if any” is doing real work there. Check whether yours has one before you sign a volume you are hoping for rather than one you know.

The cargoes the law leaves out

Six categories sit outside both regimes, and the same list appears twice: once as an exception to confidential service-contract filing and once as an exception to tariff publication itself. bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles, waste paper and paper waste.

For those, there is no filed contract and no published tariff. Anyone importing metal scrap who wants to know what their free time is has precisely one place to look, which is their own correspondence. The regulatory shortcut other cargoes get does not exist.

What a desk should do with this

Three steps, in this order, and only the first one is a lookup:

1. Find out whether you have a contract at all. Many desks run on tariff rates and assume otherwise; a few have a contract and count from the tariff, which is merely conservative.
2. If you have one, extract the free time into the shipment record, per lane, per carrier, per equipment type, with the contract’s own wording beside it. Nobody will ever be able to look it up for you, so it has to live somewhere your deadlines are derived from.
3. If you do not, read the tariff. That is public, and the carrier tariff entry explains where the regulator publishes each carrier’s location.

Then work the document deadlines backwards from the last free day that number produces. Holding the contract terms per lane next to the trade contract, and deriving every date from them rather than from a figure someone remembered, is what demurrage and detention software that counts from your own contract has to do before any of its alerts mean anything.