# Who pays demurrage and detention: DAP, CIF, CFR, FOB, DDP

Incoterms allocate costs between the buyer and the seller in the sales contract. The carrier is not a party to it and bills by its own contract and tariff. Since the D.C. Circuit's September 2025 decision, no FMC regulation lists who may be billed, but 46 CFR 541.6(a)(4) still requires the invoice to show why the billed party is liable.


## Two contracts, two answers

A purchase has two separate sets of papers. The **sales contract** between you and the supplier may use an Incoterms rule. The **contract of carriage**, the bill of lading and the carrier's tariff, is between the carrier and the shipper, and the carrier invoices according to that.

The International Trade Administration describes Incoterms as rules that define the responsibilities of sellers and buyers: who contracts for carriage, who insures, who clears customs, and who bears each cost. It also says they are generally incorporated in the contract of sale, and that they do not address, among other things, when title passes, liability for delayed delivery, or dispute resolution ([trade.gov](https://www.trade.gov/know-your-incoterms)). The rule texts are ICC copyright, so we do not reproduce them; read the one your contract names, in the version it names.

| Term | Rough effect on the ocean leg (our summary, not the ICC text) | What it does not decide |
|---|---|---|
| **FOB** (Free on Board) | The buyer arranges and pays the ocean carriage | Who the carrier invoices for delay at the US port |
| **CFR** (Cost and Freight) | The seller arranges and pays carriage to the destination port | Who pays if the box sits there after free time |
| **CIF** (Cost, Insurance and Freight) | As CFR, and the seller also arranges cargo insurance | Same |
| **DAP** (Delivered at Place) | The seller arranges carriage to a named place of destination | Same, and the carrier may still bill the consignee |
| **DDP** (Delivered Duty Paid) | As DAP, and the seller also deals with import clearance and duty | Same |

The last column is the point. None of these terms makes a carrier invoice a particular person. The carrier bills the party its own documents name, usually the shipper or the consignee on the bill of lading. If that is you and the delay was the seller's, your remedy is against the seller under the sales contract, after you have dealt with the invoice.

## What the FMC billing rule says about the billed party

- **Scope.** 46 CFR 541.2 covers any invoice by an ocean common carrier, marine terminal operator or non-vessel-operating common carrier for demurrage or detention.
- **Definitions.** 541.3: the *billed party* is the person receiving the invoice who is responsible for paying the charge; the *consignee* is the ultimate recipient of the cargo.
- **The basis for liability.** 541.6(a)(4): the invoice must include "the basis for why the billed party is the proper party of interest and thus liable for the charge." If it does not, see 541.5: failure to include any required minimum information eliminates the billed party's obligation to pay the charge. The FMC's own FAQ adds that under 46 U.S.C. 41104(f) this cancels the obligation on that invoice but does not stop the carrier from reissuing the charge on a compliant one ([FMC OSRA FAQ](https://www.fmc.gov/complaints-and-assistance/ocean-shipping-reform-act-of-2022-implementation/)).
- **Wrong person invoiced.** 541.7(d): the billing party may invoice the correct person, but only within 30 calendar days of the date the charge was last incurred; otherwise the billed party is not required to pay.

## What was set aside in 2025

The 2024 final rule (89 FR 14330) also had a section, 46 CFR 541.4, on "properly issued invoices": a carrier could invoice the person for whose account it carried the cargo and who contracted with it, or the consignee, but not both and not anyone else. The World Shipping Council challenged the rule. On September 23, 2025 the D.C. Circuit held that section 541.4 was arbitrary and capricious: the FMC had not explained the apparent inconsistency between its contractual-privity rationale and its categorical bar on billing motor carriers that are in privity with the billing party. The court severed and set aside 541.4 and left the rest of the rule in place (*World Shipping Council v. FMC*, 152 F.4th 215). The FMC removed the section from the CFR in a final rule effective December 29, 2025 (90 FR 60579), and stated that the other provisions of the rule remain in effect.

The practical result, as of 2026-10-21 and on those sources: there is no FMC regulation in part 541 that lists who may be invoiced. The invoice must still show the basis for the billed party's liability, and the 30-day clocks in 541.7 still apply. Guides that cite 541.4 as current are out of date. We found no later FMC rulemaking on part 541 in the Federal Register through that date; see [the FMC rules and their status](/en/fmc/).

## What to do with an invoice addressed to you

1. Read the bill of lading: are you shipper, consignee or notify party? Compare with the basis the invoice gives.
2. Check the invoice has the other items of 541.6 ([list](/en/fmc/)). A missing item is a ground to ask for a corrected invoice in writing.
3. Recheck the dates with the [last free day calculator](/en/demurrage/last-free-day/); see [demurrage vs detention](/en/demurrage/vs/) for which charge you were billed.
4. Draft the request with the [letter tool](/en/demurrage/letter/). Keep the invoice's own deadline while you wait: the rule gives you at least 30 calendar days from the invoice date to ask for mitigation, refund or waiver (541.8).
5. Then, if the seller owes you under the sale terms, claim it from the seller.


## FAQ

**If I buy DAP or DDP, can the carrier still bill me?**

Yes, if the carrier's papers make you the party liable, for example as consignee. The sale term decides who owes whom between buyer and seller; it does not stop a carrier invoicing the party on its bill of lading. The invoice must show the basis for your liability (46 CFR 541.6(a)(4)).

**Can I ask my supplier to pay a demurrage invoice under CIF or CFR?**

Only if the sale contract or the term you agreed puts that cost on the seller. Incoterms by themselves do not say who pays delay charges after discharge; ITA's summary lists delayed delivery and dispute resolution among the things they do not address. Put it in the contract.

**Is 46 CFR 541.4 still in force?**

No. The D.C. Circuit set it aside on September 23, 2025 and the FMC removed it from the CFR effective December 29, 2025. The other provisions of part 541 remain in effect.


## Sources

- [46 CFR part 541, Demurrage and detention (eCFR)](https://www.ecfr.gov/current/title-46/part-541)
- [FMC final rule 90 FR 60579 (2025-12-29), 541.4 removed](https://www.federalregister.gov/documents/2025/12/29/2025-23920/demurrage-and-detention-billing-requirements-properly-issued-invoices-provision-set-aside-by-court)
- [World Shipping Council v. FMC, No. 24-1088 (D.C. Cir. Sept. 23, 2025)](https://media.cadc.uscourts.gov/opinions/docs/2025/09/24-1088-2136451.pdf)
- [Know Your Incoterms (International Trade Administration, trade.gov)](https://www.trade.gov/know-your-incoterms)
- [FMC final rule 89 FR 14330 (2024-02-26), Demurrage and Detention Billing Requirements](https://www.federalregister.gov/documents/2024/02/26/2024-02926/demurrage-and-detention-billing-requirements)

Canonical: https://purserhouse.com/en/demurrage/who-pays/