Dear Valued Customer,
On June 16, 2022, the Ocean Shipping Reform Act of 2022 (“OSRA 22”) was signed into law. It was the first major revision of US maritime regulatory statutes since 1998. OSRA 22 is a response to the disruptions and sharp spikes in international shipping costs that occurred since the COVID pandemic in 2020. It grants new authority to the Federal Maritime Commission (FMC) to assert regulatory oversight of ocean carrier practices affecting consumers of international ocean services.
The legislation addresses a perception that international ocean carriers have discriminated against US-origin cargoes with rate practices, equipment availability and penalty charges. Importers and exporters alike have also complained of major shipping rate increases, lack of competitive conditions in the ocean carrier industry, and sharp assessments of demurrage and detention fees.
While most provisions require action from the FMC before taking effect, provisions for detention and demurrage invoicing took effect immediately. The FMC issued an advisory notice on June 24, 2022 clarifying that regulated entities must comply with all relevant statutory requirements.
- Detention and Demurrage (D&D) — Not later than 45 days after enactment of the Act, the FMC must initiate a rulemaking further defining prohibited practices by VOCCs, MTOs, shippers, and ocean transportation intermediaries to further clarify reasonable rules and practices related to issues identified in a previous FMC Final Rule regarding the assessment of D&D charges. This includes a determination of which parties may be appropriately billed for any D&D or other similar per container charges. The Act adds a new provision concerning the format of D&D invoices, which went into effect immediately such invoices must include the following 13 fields:
- Date of container availability
- Port of discharge
- Container number(s)
- Exports: The earliest return date
- Allowed free time days
- Free time start date
- Free time end date
- Applicable detention or demurrage rule on which the daily rate is based
- Applicable rate(s) per applicable rule
- Total amount due
- Contact email, phone, etc. for questions or requests for mitigation
- Statement that charges are consistent with FMC rules on D&D
- Statement that invoiced charges were not caused or contributed by VOCC’s performance
NOTE: JJB’s NVOCC Safe Harbor Pass-through Detention and Demurrage Policy
As an NVOCC, JJB simply passes along D&D charges from VOCCs to our customers upon request and at the discretion of JJB. As such, JJB has filed an FMC tariff rule 2-005 as follows:
- All detention and demurrage charges as invoiced by the underlying ocean common carrier are passed through to the relevant shipper. Carrier shall provide a true copy of each detention and demurrage invoice made by the underlying ocean common carrier.
- Carrier is a non-vessel-operating common carrier (NVOCC) operating under the Safe Harbor provision of The Shipping Act of 2022 – Public Law 117-146, which provides that an NVOCC that passes through to the relevant shipper a detention and demurrage invoice made by the underlying ocean common carrier, and is not otherwise found to be responsible for the charges by the U.S. Federal Maritime Commission (FMC), shall not be subject to penalties or refund requirements issued by the FMC; rather the underlying ocean common carrier shall be subject to any penalties or refund requirements issued by the FMC.
Based on the foregoing, JJB is not responsible for providing the 13 additional data fields but will instead simply provide a copy of the VOCC’s invoice. We respectfully request that customers contact the VOCC directly concerning any questions concerning any missing data fields or any other aspect of the D&D charges.
OSRA 22 also attempts to address other concerns as follows:
- Shipping Exchange Registry — To be established and administered by the FMC which provides a service to ocean carriers and shippers by mediating contract disputes.
- Prohibition on Retaliation — Adds to existing statutory prohibitions against retaliation. A vessel operating common carrier (VOCC), marine terminal operator (MTO), or ocean transportation intermediary (OTI) may not retaliate against a shipper, an agent of a shipper, an OTI, or a motor carrier by refusing, or threatening to refuse, otherwise available cargo space accommodation; or resort to any other unfair or unjustly discriminatory action as retaliation for patronizing another carrier; or filing a complaint with the FMC; or etc.
- Annual Public Disclosure — To be published by the FMC with annual updates on a publicly available website, all findings of false detention and demurrage invoice practices by VOCCs, and all penalties imposed or assessed against VOCCs.
- Unfair, Discriminatory Methods — No later than 60 days after enactment of the Act, the FMC will initiate a rulemaking definingunfair or unjustly discriminatory methods to clarify vague pre-existing law.
- Refusal to Deal — Not later than 6 months after enactment of the Act, the FMC will issue a final rule defining unreasonable refusal to deal or negotiate with respect to vessel space.
- Assessment of Penalties or Refunds – FMC is authorized to order refunds in enforcement proceedings in addition to, or in lieu of, civil penalties.
- Data Collection — The FMC will publish on its website a calendar quarterly report on the total import/export tonnage and total loaded and empty 20-foot equivalent units per vessel making port in the US and any U.S. territory operated by each VOCC.
- Dwell Time Statistics — Each port, MTO, and chassis owner or provider with a fleet of over 50 chassis that supplies chassis for a fee shall submit for publication to the FMC statistics relating to the dwell time of equipment used in intermodal transportation at the top 25 ports, including inland ports.
- FMC Investigation and Oversight — Not later than 18 months after enactment of the Act, the FMC will establish an Office of Consumer Affairs and Dispute Resolution Services and a webpage that allows for the submission of comments, complaints, concerns, reports of noncompliance, requests for investigation and for alternative dispute resolution. OSRA 22 places the burden of establishing the reasonableness of demurrage and detention charges on the issuing ocean carrier.
- Emergency Order Authority — Not later than 60 days after the enactment of the Act, the FMC will seek public comment regarding (A) whether congestion of the carriage of goods has created an emergency situation of a substantial, adverse effect on the competitiveness and reliability of the international ocean transportation supply system; (B) whether an emergency order would alleviate such an emergency situation; and (C) the appropriate scope of such prospective emergency order.
- Chassis Pool Best Practices — No later than April 1, 2023, the FMC in an agreement with the Transportation Research Board, will carry out a study and develop best practices for on- or near-terminal chassis pools that provide service to MTOs, motor carriers, railroads, and other stakeholders with the goal of optimizing supply chain efficiency/effectiveness.
- Hazmat Transport Discrimination — Not later than 90 days after the enactment of the Act, the Comptroller General will initiate a review whether any decisions by ocean VOCCs discriminated against maritime transport of qualified HAZMAT by denying vessel space accommodations, equipment, or other instrumentalities needed to transport such materials.
- Storage and Transfer of Dwelling Containers — Not later than 90 days after the enactment of the Act, the Assistant Secretary for Transportation Policy, the Administrator of the Maritime Administration, and the Chairperson of the FMC, will discuss feasibility and strategies to identify storage and transfer land for containers due to port congestion.
- Adoption of Technology at U.S Ports — Not later than 1 year after enactment of the Act, the Comptroller General will submit to Congress a report assessing the adoption of technology: i.e. The capabilities of U.S. ports compared to foreign ports; Whether technology adoption could lower cargo handling costs; Regulatory and other barriers to the adoption of technology at U.S. ports; and The state of technology and the workforce.
Thank you for your time and attention. If you have any questions, please contact your nearest JJB representative.
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