Notice of Proposed Demurrage & Detention Rule May Be Issued in Oct.

FMC Press Release Posted September 22, 2022 -- The Federal Maritime Commission was briefed at its September meeting, held Wednesday, on progress implementing the Ocean Shipping Reform Act of 2022 (OSRA) and the findings of the Maritime Transportation Data Initiative (MTDI).

Commissioner Carl W. Bentzel discussed his work leading the MTDI and shared what this project identified as key data gaps in moving an ocean container from mode-to-mode. The MTDI lasted from December 2021-June 2022, during which time 18 public meetings were held exploring data challenges across the entire maritime supply chain.

Commission staff reported on progress in implementing OSRA and discussed the Notice of Proposed Rulemaking (NPRM) on demurrage and detention billing requirements that is anticipated to be issued in October. OSRA requires the Commission to issue a rulemaking revising the minimum information that common carriers must include on demurrage or detention invoices as well as further define prohibited practices by common carriers, marine terminal operators, shippers, and ocean transportation intermediaries under 46 U.S.C. 41102(c) regarding the assessment of demurrage or detention charges.

In related news, the Commission will begin using Regulations.Gov for all its rulemaking activity in the near future. This move to the Regulations.Gov platform will make filing comments, and finding information about, Commission rulemakings easier and more streamlined for the public. The Commission will issue instructions on how to use Regulations.Gov as well as guidance on when the public should use or check the agency’s existing Dockets webpage to track the Commission’s rulemaking activities.

In the closed session of the meeting, Commissioners had further discussions on the NPRM on demurrage and detention billing requirements, and also discussed work being done to establish a permanent process for handling Charge Complaints. The Commission has been handling Charge Complaints using interim procedures since July 2022. Discussion about these items was held in private to allow the Commission to deliberate on policy considerations, proposed text, and other internal matters.

Staff reported that substantial progress has been made in implementing many of the requirements established by OSRA. Since the law’s enactment on June 16, 2022, the Commission has issued the NPRM on unreasonable refusal to deal in regard to vessel space and will soon publish the NPRM on demurrage and detention billing practices. Additionally, two requests for public comment were issued, seeking feedback on the benefits of issuing an emergency order on information sharing, and secondly, the Commission’s proposed plan for establishing a data collection initiative related to an ocean carrier’s import and export performance in the U.S. trades.

The Commission has established a dedicated landing page on its website where interested members of the public can track the status of OSRA implementation.

FMC to Penalize Carriers that Refuse to Deal With Shippers

FMC Press Release Posted September 13, 2022 -- The Federal Maritime Commission is seeking public comments in response to a Notice of Proposed Rulemaking (NPRM) issued today implementing a requirement of the Ocean Shipping Reform Act of 2022 (OSRA) to define unreasonable refusal to deal or negotiate with respect to vessel space accommodation provided by an ocean common carrier.

One provision of OSRA requires that an ocean common carrier shall not unreasonably refuse to deal or negotiate with respect to vessel space accommodation. The NPRM outlines the elements which would be necessary to establish a violation and the criteria the Commission would consider in assessing reasonableness if the NPRM is finalized. It would also shift the burden of proving the refusal to deal was reasonable from shippers to ocean common carriers.

The NPRM would apply to both import and export shipments.

Interested parties will have 30 days to submit comments to the Commission once the NPRM is published in the Federal Register. Because the law requires the Commission to publish a Final Rule within six months of OSRA’s enactment, comments should be submitted by the deadline.

In the NPRM, the Commission proposes that complainants alleging an unreasonable refusal to deal with respect to vessel space accommodation would be required to meet three elements:

1. That the respondent is an ocean common carrier;

2. That the respondent refuses to deal or negotiate with respect to vessel space; and

3. That the refusal is unreasonable.

The NPRM proposes a burden-shifting regime that would allow ocean common carriers to establish why it was not unreasonable to refuse vessel space to a particular complainant. The Commission proposes a non-exhaustive list of factors it will consider when deciding whether a refusal to deal was unreasonable. Some factors the NPRM proposes the Commission consider include whether the ocean common carrier followed a documented export strategy, engaged in good faith negotiations, and articulated legitimate transportation factors. This burden-shifting would happen after the complainant or the Commission’s Bureau of Enforcement, Investigations, and Compliance has established a prima facie case that the three elements listed above have been met.

As the phrase “vessel space accommodations” has never been defined in legislation, or interpreted by the Commission, the NPRM proposes to define this term.

As the circumstances of each shipment are unique, the Commission acknowledges it is impossible to regulate for every possible scenario, and accordingly, cases alleging a violation will be factually driven and considered on a case-by-case basis.

The Commission consulted with the U.S. Coast Guard on this NPRM as required by the law.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.

FMC Releases Interim Protocol for Submitting “Charge Complaints”

FMC Press Release Posted July 14, 2022 -- The Federal Maritime Commission gives the following guidance for parties wishing to dispute charges assessed by common carriers that they believe may not comply with the Ocean Shipping Reform Act of 2022, which became Public Law 117-146 on June 16, 2022.

Parties interested in filing such “Charge Complaints” at the Commission may do so by following the below steps:

• Identifying the common carrier

• Identifying the specific alleged violations of 46 U.S.C. §§ 41102 and/or 41104(a)

• Gathering and submitting supporting documentation, as appropriate, including:

  • Invoices

  • Bill of Lading Numbers

  • Evidence of whether the charge(s) have been paid

• Confirming that the disputed charge was incurred on or after the enactment of P.L. 117-146

• Submitting all relevant materials in one email (if possible) to chargecomplaints@fmc.gov

When the Commission receives sufficient information, it will promptly initiate an investigation, which could ultimately result in a civil penalty and order for a refund of charges paid.

Investigations by the Commission are for law enforcement purposes and do not constitute representation as attorney for the complainant or a guarantee of refunds. If the filer chooses to pursue and control their own legal case, including with the assistance of their own attorney if desired, they may do so under 46 U.S.C. § 41301(a) and Part 502 of the Commission’s regulations.

To do so, filers must submit a formal or informal complaint. Persons may also seek alternative dispute resolution services by contacting the Office of Consumer Affairs and Dispute Resolution.

This guidance communicates the timely implementation of a self-executing provision of PL 117-146. The Commission reserves the right to amend processes related to “Charge Complaints” at any time.