Dialogue on FMC OSRA Rulemaking Process Set for Dec. 15

Members of the National Association of Waterfront Employers (NAWE) will have an opportunity to participate in an open dialogue regarding the FMC's Ocean Shipping Reform Act of 2022 (OSRA) Rulemaking Process this December 15, 2022. Commissioner Carl Bentzel will be the keynote speaker at the NAWE Annual meeting, which will take place December 14-15, 2022, at The Mayflower Hotel in Washington, D.C. Commissioner Bentzel will provide NAWE members with an update to the FMC's efforts to implement its OSRA 2022 authorities through the rulemaking process. The Association, for its part, will provide insights on NAWE's strategy to mitigate the risks to marine terminal operators arising from the Commission's efforts. The meeting will also discuss the associated challenges that have arisen from OSRA 2022, including numerous federally-mandated data collection efforts aimed at ocean carriers and marine terminal operators, and a notable increase in demurrage and detention enforcement actions and reparations claims. Interested parties can track the status of OSRA implementation.

Maffei Visits Bay Area for Congressional & Industry Meetings

FMC Press Release Posted November 15, 2022 -- Chairman Daniel B. Maffei traveled to the San Francisco Bay Area on October 31 and November 1, 2022 for a series of meetings exploring shipping, supply chain, infrastructure, and technology issues. The visit began with Chairman Maffei participating in a Congressional roundtable discussion held Monday, October 31st in Oakland and led by Representatives Jim Costa, Mike Thompson, Barbara Lee, and John Garamendi. Panelists from key agencies at the federal and state levels were present to discuss progress on addressing supply chain challenges. Panelists also heard from shippers and other supply chain participants about issues they continue to have with ocean transportation services. “I applaud these Members of Congress for the interest they have taken in shipping and their determination that ocean carriers do a better job of serving U.S. shippers, especially agricultural exporters. The experiences and frustrations their constituents have endured the past two years are why the Ocean Shipping Reform Act of 2022 was passed quickly and overwhelmingly. I am committed to implementing OSRA in a manner that is punctual and reflective of Congressional intent. This roundtable demonstrates continuing Congressional attention to the supply chain as well as how ocean carriers conduct themselves in the marketplace,” said Chairman Maffei. Also on Monday, the Chairman met with Danny Wan, Executive Director of the Port of Oakland, and his key senior maritime operations staff to discuss the Port’s vital role in supporting U.S. agricultural export shippers. Approximately 50% of Oakland’s volumes are export shipments. The Chairman toured the port as part of his visit, seeing firsthand terminal operations and sites the Port plans on developing to increase its abilities to serve all shippers. “Oakland is a vital and preferred gateway for export shippers based not only in California but deep into the Heartland of the United States. Identifying what steps can be taken to improve the frequency and certainty of vessel calls at Oakland is something the Commission might be able to explore through our Vessel-Operating Common Carrier Audit Program,” said Chairman Maffei. On Tuesday, November 1st, the Chairman traveled across the Bay to meet with Willie Adams, the President of the San Francisco Port Commission, Elaine Forbes, the Executive Director of the Port of San Francisco, and key port leadership staff to discuss that facility’s maritime business. The Port of San Francisco serves cruise, bulk, project, and auto trades and is working to bring more business to their maritime operations. Ms. Forbes and her staff outlined investments they are making in facilities improvements, including upgrading their electrical grid, improving road access to industrial port facilities, and identifying new opportunities to grow their maritime business. Also addressed were plans the Port has for addressing sea level rise and protecting the port and parts of the city vulnerable to flooding and storm surges. “Supply chain congestion revealed to people outside of the maritime sector the tremendous value and concerning scarcity of port capacity. The Port of San Francisco recognizes and is acting on the opportunity to grow their industrial maritime business, increase service offerings to cargo shippers, and increase utilization of their cargo facilities. Mr. Adams, Ms. Forbes, and the Port staff are to be commended for their leadership in prioritizing improvements to their industrial operations. I was also impressed by how strongly the Port’s cruise business has recovered from COVID. The number of passengers visiting San Francisco has in some months exceeded pre-pandemic levels. Pleasure cruising is an important part of many cities’ tourism sectors. I am certain the expanded rights to a refund the Commission created earlier this year is providing consumers the necessary confidence to book cruise voyages,” said Chairman Maffei. Chairman Maffei finished his visit to the Bay Area by meeting with the Chief Executive Officers of Cargomatic and FlexPort, two supply chain technology companies innovating how shippers move ocean cargo. Topics of conversation covered not only their respective business models, but their experiences serving customers the past two-years, and their observations about trends in trade, shipping, and the economy.

FMC Names Chris Hughey General Counsel

The Federal Maritime Commission has hired Phillip C. “Chris” Hughey as General Counsel and appointed him to be a member of the Senior Executive Service.

In his capacity as General Counsel to the Commission, Mr. Hughey will provide legal advice and recommendations to the Chairman and Commissioners on regulatory and policy matters. He will serve as a member of the agency’s senior management team and will also be responsible for supervising the work of attorneys assigned to the Office of the General Counsel.

Mr. Hughey began his career in public service in 1997 as an attorney in the Office of the General Counsel at the FMC, and later served as the Commission’s Deputy General Counsel. In 2007, he joined the Federal Election Commission (FEC) as its Deputy General Counsel, and was designated as the FEC’s Acting General Counsel from August 2010 to September 2011. Mr. Hughey assumes his new role at the FMC following a ten-year career in the U.S. Department of State as a Foreign Service Officer, where his postings included Brazil, Kuwait, and Madagascar.

“We are fortunate to have Chris Hughey join the Commission as the General Counsel. His prior FMC experience and litigation background is valuable. He is uniquely qualified to assume these duties and my colleagues and I will benefit from his legal counsel,” said Chairman Daniel Maffei.

Mr. Hughey possesses extensive experience as a litigator, having argued cases before the Supreme Court of the United States, the U.S. Courts of Appeals for the District of Columbia and Fourth Circuits, and the U.S. District Court for the Central District of California.

Mr. Hughey earned J.D. and LL.M. degrees from Cornell University in 1996, an MPA from Harvard University in 2007, and a B.A. from the University of North Carolina at Wilmington in 1993. He is admitted to the bars of the State of New York, the U.S. Supreme Court, the U.S. Court of Appeals for the District of Columbia Circuit, and the U.S. Court of Appeals for the Fourth Circuit.

FMC Proposes New Demurrage & Detention Billing Rules

Demurrage and detention billing practices of vessel operating common carriers (VOCCs), non-vessel-operating common carriers (NVOCCs), and marine terminal operators (MTOs) must be more clear, have more structure and have more punctuality -- this is the goal of the new rule that the Federal Maritime Commission is proposing.

This Notice of Proposed Rulemaking (NPRM) is responsive to a requirement of the Ocean Shipping Reform Act of 2022 (OSRA) and continues work the Commission initiated in 2018 when it ordered an investigation (Fact Finding 28) led by Commissioner Rebecca F. Dye into conditions and practices of VOCCS and MTOs related to demurrage, detention, and per diem charges. That fact finding led to the Commission issuing a final rule in May 2020 addressing how the reasonableness of demurrage and detention practices of VOCCs and MTOs will be interpreted.

If this proposed rule is adopted, VOCCs, NVOCCs, and MTOs will all be required to issue bills for demurrage or detention only to parties that they have a contractual relationship with, to be clear regarding the nature of the charges, and issue invoices within 30 days after the charges stop accruing, and provide 30 days to dispute the charges with clear information about how charges should be disputed.

Specifically, the Commission is proposing four actions in this NPRM:

• Adopting the list of minimum information that common carriers must include in demurrage or detention invoices as mandated in OSRA and codified at 46 U.S.C. 41104(d)(2).

• Adding to the list referenced immediately above additional information that must be included in or with a demurrage or detention invoice.

• Further defining prohibited practices by clarifying which parties may be billed for demurrage or detention charges.

• Establishing billing practices that billing parties must follow when invoicing for demurrage or detention charges.

The Commission is proposing that a properly issued invoice is only issued to the person that has contracted with the billing party for the carriage of goods or space to store cargo and the billed party is responsible for the payment of any incurred demurrage or detention charge.

The Commission is specifically interested in receiving comments on whether it would be appropriate to include the consignee named on the bill of lading as another party who may receive a demurrage or detention invoice.

Interested parties will have 60 days to submit comments to the Commission once the NPRM is published in the Federal Register. The Commission is now using the Regulations.gov portal to receive filed comments. A link within the Federal Register notice will take commenters to a page established for this NPRM. You may submit comments identified by docket number FMC-2022-0066 at https://www.regulations.gov.

This NPRM follows an Advance Notice of Proposed Rulemaking (ANPRM) (Docket No. 22-04) on demurrage and detention billing practices issued in February. That ANPRM was issued in response to an interim recommendation made by Commissioner Dye resulting from her work leading Fact Finding 29, “International Ocean Transportation Supply Chain Engagement,” examining COVID-19 related effects on the ocean-linked supply chain. The Commission received over 80 comments from VOCCs, NVOs, MTOs, shippers, and other parties involved in the transportation of ocean containers in response to the request for public comments issued in the ANPRM. Information provided in those filings were considered in drafting this NPRM.

This NPRM is the latest initiative taken by the FMC to implement OSRA, signed into law by President Joseph R. Biden on June 16, 2022. Commission progress in meeting the requirements established by the law can be found on the dedicated “OSRA Implementation” landing page established on the Commission’s website.