IHA Submits Comments to FMC Rulemaking

On June 16, 2022, President Joe Biden signed the Ocean Shipping Reform Act of 2022 (OSRA22) into law. IHA participated in coalition efforts to see that OSRA was introduced in Congress with the strongest language possible and that attempts to strip such language during the year-long legislative process were stymied.  As a result, OSRA22 greatly enhances the Federal Maritime Commission’s (FMC) authority to crack down on ocean carriers’ unreasonable business practices, including those concerning shipping containers, which contributed to supply chain woes and raised costs for shippers.

Some OSRA22 reforms such as minimum information that ocean carriers must now include in demurrage or detention invoices became effective upon enactment. Other reforms must be done by the FMC administratively and its website lists agency steps to implement the law. An important step was taken on Oct. 14, when the FMC published a Notice of Proposed Rulemaking (NPRM) on Demurrage and Detention Billing Requirements in the Federal Register.

The FMC’s proposed rule is to bring more clarity, structure and punctuality to demurrage and detention billing practices of vessel operating common carriers (VOCCs), non-vessel-operating common carriers (NVOCCs) and marine terminal operators (MTOs).  The comment period closed Dec. 13 and if the rule is adopted, VOCCs, NVOCCs and MTOs will be required to issue bills for demurrage or detention only to parties they have a contractual relationship with; be clear about the nature of the charges; issue invoices within 30 days after the charges stop accruing; and provide 30 days to dispute the charges with information about how charges should be disputed.

The FMC sought feedback on four specific actions in the proposed rule such as further defining prohibited practices by clarifying which parties may be billed for demurrage or detention charges. The FMC also expressed interest “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 notice.”

On Dec. 12, IHA President Derek Miller submitted comments on behalf of IHA to the FMC that support the rulemaking’s actions to restore a more equitable balance between shippers and ocean carriers.  IHA’s comments, which can be found here, state that the four actions proposed by the FMC are all positive reforms. In addition, IHA believes it would be helpful to include the consignee named on the bill of lading as another party who may receive a demurrage or detention notice.



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