Clock Stopping Events Will Not Be Part of Detention or Demurrage Invoices
The Federal Maritime Commission released a notice of proposed rulemaking further refining prohibited practices for demurrage and detention, which is required under the Ocean Shipping Reform Act (OSRA).
The Commission is proposing to:
This rulemaking, announced Oct. 7, follows an advance notice of proposed rulemaking from February (see 2202070026 and 2203250028). At that time, the FMC thought about requiring those billing for demurrage and detention to identify "clock-stopping" events -- in other words, conditions where per-day billing should not apply because there was no way to drop off or pick up because there were no available containers or appointments or there were restrictions on the chassis the port would accept. Ultimately, it decided not to, listening to carriers and ports, who said it would be nearly impossible to know all that.
"Instead of requiring billing parties to identify specific 'clock-stopping' events on demurrage and detention invoices, the proposed rule would require the billing party to identify the specific dates on which they charged demurrage or detention. The proposed rule permits billing parties to take into account any intervening events that affected the charges, if known, and enables billed parties to confirm or dispute the validity of charges on specific dates," the notice says.
Detention and demurrage notices will not be sent to customs brokers and motor carriers if this is the version of the rule that becomes final. Motor carriers also will not have to follow these rules if they bill a vessel-operating common carrier.
"The Commission views the practice of sending an invoice to multiple parties involved in the shipping transaction rather than sending an invoice for demurrage or detention charges to only the person that has contracted with the billing party for the carriage or storage of goods as untenable," the notice said.
The rule will apply to non-vessel operating common carriers, even though NVOCCs argued they should not be in the scope of the regulation. "There is a greater need for transparency when the NVOCCs mark up demurrage or detention charges assessed by [vessel-operating common carriers] or [marine terminal operators] or when NVOCCs charge demurrage or detention based on their own tariff rules or negotiated agreements," FMC wrote.
FMC is still undecided as to whether consignees on the bill of lading can be sent demurrage or detention invoices, and asked for comments on that issue. Comments can be submitted for 60 days after the notice is published in the Federal Register at regulations.gov, docket number FMC-2022-0066.
The previous round of notice and comment drew more than 80 comments.
The items required on the invoice under OSRA are:
FMC proposes that the bill of lading number and the basis for why the billing party was invoiced also be on the invoice, and notes that ports of discharge do not apply to export shipments.