Demurrage and Detention Billing Requirements, 62341-62358 [2022-22290]

Download as PDF Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules disseminating information to transit fleets, and enforcement (including auditing reported information, and site visits to confirm vehicle equipment).25 As such, we find that CARB has adequate personnel and funding for the ICT regulation. 6. EPA’s Regulation Evaluation Conclusion Based on the above discussion, we believe these regulations are consistent with the relevant CAA requirements, policies and guidance. C. The EPA’s Recommendations To Further Improve the Rules Several of the defined terms in the ICT regulation reference definitions set forth in paragraphs of other CCR sections that have been renumbered since the ICT regulation was adopted. The cross-references should be updated when CARB next considers amendments to the ICT regulation. The specific defined terms with the outdated CCR references include: (1) the term ‘‘compressed natural gas (CNG),’’ which should be updated to cite 17 CCR 95481(a)(30) rather than 17 CCR 95481(a)(27); (2) the term ‘‘renewable hydrocarbon diesel,’’ which should be updated to cite 17 CCR 95481(a)(130) rather than 17 CCR 95481(a)(123); and (3) the term ‘‘biomethane,’’ which should be updated to cite 17 CCR 95481(a)(22) rather than 17 CCR 95481(a)(20). jspears on DSK121TN23PROD with PROPOSALS D. Public Comment and Proposed Action As authorized in section 110(k)(3) of the Act, the EPA proposes to fully approve the submitted ICT regulation because it fulfills all relevant requirements. We will accept comments from the public on this proposal until November 14, 2022. If we take final action to approve the submitted ICT regulation, our final action will incorporate the associated rules into the federally enforceable SIP. III. Incorporation by Reference In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the California rules listed in tables 1 and 2 and discussed in Section I of this preamble. The EPA has made, and will continue to make, these materials available through https:// www.regulations.gov and at the EPA Region IX Office (please contact the 25 CARB’s ICT Staff Report, page VIII–28. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). IV. Statutory and Executive Order Reviews Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA’s role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action: • Is not a ‘‘significant regulatory action’’ subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011); • Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.); • Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.); • Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4); • Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999); • Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997); • Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); • Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 62341 The Innovative Clean Transit regulation furthers state environmental justice goals by transitioning to clean transportation modes in low-income and disadvantaged communities. There is no information in the record inconsistent with the stated goals of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and indigenous peoples. List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements. Authority: 42 U.S.C. 7401 et seq. Dated: October 3, 2022. Martha Guzman Aceves, Regional Administrator, Region IX. [FR Doc. 2022–21910 Filed 10–13–22; 8:45 am] BILLING CODE 6560–50–P FEDERAL MARITIME COMMISSION 46 CFR Part 541 [Docket No. FMC–2022–0066] RIN 3072–AC90 Demurrage and Detention Billing Requirements Federal Maritime Commission. Notice of proposed rulemaking. AGENCY: ACTION: The Federal Maritime Commission (Commission) is seeking public comment on a proposed rule that requires common carriers and marine terminal operators to include specific minimum information on demurrage and detention invoices and outlines certain billing practices relevant to appropriate timeframes for issuing invoices, disputing charges with the billing party, and resolving such disputes. The proposed rule addresses considerations identified in the Ocean Shipping Reform Act of 2022. The proposed rule would adopt minimum information that common carriers must include in a demurrage or detention invoice; add to this list additional information that must be included in or with a demurrage or detention invoice; further define prohibited practices by clarifying which parties may be appropriately billed for demurrage or detention charges; and establish billing practices that billing parties must follow when invoicing for demurrage or detention charges. DATES: Submit comments on or before December 13, 2022. SUMMARY: E:\FR\FM\14OCP1.SGM 14OCP1 62342 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules You may submit comments by using the Federal eRulemaking Portal at www.regulations.gov, under Docket No. FMC–2022–0066, Demurrage and Detention Billing Requirements. Please refer to the ‘‘Public Participation’’ heading under the SUPPLEMENTARY INFORMATION section of this notice for detailed instructions on how to submit comments, including instructions on how to request confidential treatment and additional information on the rulemaking process. FOR FURTHER INFORMATION CONTACT: William Cody, Secretary; Phone: (202) 523–5908; Email: secretary@fmc.gov. SUPPLEMENTARY INFORMATION: ADDRESSES: Table of Contents I. Introduction and Background II. Summary of Comments III. Ocean Shipping Reform Act of 2022 IV. Discussion of Proposed Rule A. General Provisions 1. Purpose of Rule 2. Scope and Applicability 3. Definitions 4. Properly Issued Invoices B. Required Billing Information 1. Identifying Information 2. Timing Information 3. Rate Information 4. Dispute Information 5. Certifications C. Billing Practices 1. 30-Day Timeframe To Issue Demurrage or Detention Invoices 2. Timeframes for Disputing Charges and Resolving Disputes V. Public Participation VI. Rulemaking Analyses jspears on DSK121TN23PROD with PROPOSALS I. Introduction and Background As rising cargo volumes have increasingly put pressure on common carrier, port and terminal performance, demurrage and detention charges have for a variety of reasons substantially increased. For example, over a two-year period between 2020 and 2022, nine of the largest carriers serving the U.S. liner trades individually charged a total of approximately $8.9 billion in demurrage and detention charges and collected roughly $6.9 billion.1 On July 28, 2021, Commissioner Rebecca F. Dye, the Fact Finding Officer for Fact Finding Investigation No. 29, International Ocean Transportation Supply Chain Engagement (Fact Finding No. 29), recommended, among other things, that the Commission ‘‘[i]ssue an [Advance Notice of Proposed Rulemaking (ANPRM)] seeking industry input on whether the Commission should require 1 Fed. Mar. Comm’n, Detention and Demurrage (accessed on September 8, 2022), https:// www.fmc.gov/detention-and-demurrage/ #:∼:text=In%20dollar%20terms%2C%20the %20nine,over%20the%20two%2Dyear%20period. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 common carriers 2 and marine terminal operators (MTOs) to include certain minimum information on or with demurrage and detention billings and adhere to certain practices regarding the timing of demurrage and detention billings.’’ 3 The Fact Finding Officer expressed concern about certain demurrage and detention billing practices and a need to ensure that it is clear to shippers ‘‘what is being billed by whom’’ so that they can understand the charges.4 The Commission approved this Fact Finding 29 recommendation on September 15, 2021.5 On February 15, 2022, the Commission issued an ANPRM to request industry views on potential demurrage and detention billing requirements.6 Specifically, the Commission requested comments on whether a proposed regulation on demurrage and detention billing practices should apply to non-vesseloperating common carriers (NVOCCs) as well as vessel-operating common carriers (VOCCs), and whether the regulations should differ based on whether the billing party is a NVOCC or a VOCC.7 The Commission also requested comments on whether proposed regulations on demurrage and detention billings should apply to MTOs.8 In addition to requesting comments regarding the applicability of demurrage and detention billing requirements to parties such as NVOCCs and MTOs, the Commission also requested comments on what information should be required in demurrage and detention invoices.9 In addition to information necessary to identify the shipment (bill of lading number, container number, etc.), the Commission asked whether bills should include information on how the billing party calculated demurrage and detention charges.10 For example, the 2 There are two types of common carriers—vesseloperating common carriers, also called ocean common carriers, and non-vessel-operating common carriers. 46 U.S.C. 40102(7), (17), (18). 3 See Fact Finding Investigation No. 29, Interim Recommendations at 6 (July 28, 2021) (Fact Finding 29 Interim Recommendations), available at: https:// www2.fmc.gov/ReadingRoom/docs/FFno29/ FF29%20Interim%20Recommendations.pdf/. 4 Fact Finding 29 Interim Recommendations at 7. 5 Fed. Mar. Comm’n, Press Release, FMC to Issue Guidance on Complaint Proceedings and Seek Comments on Demurrage and Detention Billings (Sept. 15, 2021), https://www.fmc.gov/fmc-to-issueguidance-on-complaint-proceedings-and-seekcomments-ondemurrage-and-detention-billings/. 6 Advance Notice of Proposed Rulemaking on Demurrage and Detention Billing Requirements, 87 FR 8506 (Feb. 15, 2022). See Docket No. 22–04, Demurrage and Detention Billing Requirements. 7 87 FR at 8507, 8508–8509 (Questions 1 and 7). 8 87 FR at 8507, 8509 (Questions 2 and 3). 9 87 FR at 8508. 10 87 FR at 8508. PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 Commission requested comments on whether it should require the billing party to include the following information: identifying clear and concise container availability dates in addition to vessel arrival dates for import shipments; and, for export shipments, the earliest return dates (and any modifications to those dates) as well as the availability of return locations and appointments, where applicable.11 The Commission also requested comments on whether the bills should include information on any events (e.g., container unavailability, lack of return locations, appointments, or other forcemajeure reasons) that would justify stopping the clock on charges.12 In the ANPRM, the Commission stated that it was considering whether it should require common carriers and MTOs to adhere to certain practices regarding the timing of demurrage and detention billings. The Commission sought comments on whether the Commission should require billing parties to issue demurrage or detention invoices within 60 days after the charges stopped accruing.13 The Commission stated that the Uniform Intermodal Interchange Agreement (UIIA) 14 on which the industry relies currently requires that invoices be issued within 60 days and asked whether the 60-day timeframe was effective in addressing concerns raised by billing parties, or whether a longer or shorter time period would be more appropriate.15 In addition, the Commission requested comments on whether it should regulate the timeframe for refunds and, if so, what would be an appropriate timeframe.16 II. Summary of Comments A. General Summary The Commission received 82 comments in response to the ANPRM from 81 commenters.17 The commenters represent the following interest groups: 11 87 FR at 8509 (Question 6). FR at 8509 (Question 6). 13 87 FR at 8508, 8509 (Question 12). 14 The UIIA is a standard industry contract that provides rules for the interchange of equipment between motor carriers and equipment providers, such as VOCCs. Participation is voluntary. 15 87 FR at 8508. 16 87 FR at 8508, 8509 (Question 14). 17 The Commission received two comments from the Los Angeles Customs Brokers and Freight Forwarders Association (LACBFFA) filed on April 15, 2022 and April 22, 2022. The comments filed on April 22, 2022, incorporated a new section, ‘‘5. Multiple Parties and Invoiced Party Identity,’’ into the comments that LACBFFA filed on April 15, 2022. Compare Comments of the Los Angeles Customs Brokers and Freight Forwarders Association (Doc. No. 57) at 3 with Comments of the Los Angeles Customs Brokers and Freight Forwarders Association (Doc. No. 83) at 3–4. 12 87 E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules VOCCs; MTOs; NVOCCs, freight forwarders, and customs brokers; motor carriers; and beneficial cargo owners (BCOs). The Commission also received comments from five entities with unknown affiliations, and three other commenters that did not fit into the above categories.18 Comments from these eight entities were consistent with other commenter categories and are captured in the discussions below. All comments are identified below and are available on the docket at https:// www.regulations.gov by their document number (Doc. No.). They are also available in the Commission’s Reading Room, at: https://www2.fmc.gov/ readingroom/proceeding/22-04/. jspears on DSK121TN23PROD with PROPOSALS B. VOCCs The Commission received comments from an individual VOCC and from two trade organizations that represent most of the largest VOCCs operating in U.S.foreign ocean trade (collectively VOCC commenters).19 In general, VOCC commenters cautioned the Commission against pursuing regulation in this area. There was an overall concern that such a regulation could overreach and ultimately create more harm than good. For example, WSC warned the Commission to ‘‘focus on preventing what is unreasonable as opposed to seeking to re-make the waterfront in the image that it believes is most desirable.’’ 20 VOCC commenters noted the existing commercial relationships and how solutions to issues and innovation best develop through these natural relationships without outside parties, such as the Commission.21 The existence of commercial relationships meant issues could be resolved in contractual relations and that regulations were generally unnecessary. 18 Comments of Ellen Baicher-Armstrong (Doc. No 39); Comments of RPM Warehouse and Transportation (Doc. No 32); Comments of J. Peter Hinge (Doc. No. 9); Comments of Ocean Logistics (Doc. No. 27); Comments of Naomi Hime (Doc. No. 18); Comments of the International Warehouse Logistics Association (Doc. No. 81); Comments of Veconinter USA LLC (Doc. No. 63); Comments of Weber Distribution LLC (Doc. No. 17). 19 Comments of Crowley Lain America Services, LLC (Doc. No. 25); Comments of the Ocean Carrier Equipment Management Association, Inc. (Doc. No. 78); Comments of the World Shipping Council (Doc. No. 61). Ocean Carrier Equipment Management Association (OCEMA) and the World Shipping Council (WSC) represent 22 VOCCs, including: APL, CMA–CGM, COSCO, Evergreen, Hamburg Sud, Hapag Lloyd, HMM, Maersk, MSC, ONE, Wan Hai, and Zim. 20 Doc. No. 61 at 2. 21 See e.g., Doc. No. 61 at 2 (‘‘To the extent disagreements do arise, all parties are best served if those disagreements can be resolved promptly and amicably by the parties involved without the need for an outside adjudicator such as the FMC or an arbitrator.’’). VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 62343 VOCC commenters expressed concern about the Commission creating an environment where the Commission would create an unbalanced negotiation sphere.22 VOCC commenters asserted that the existence of commercial relationships lends itself to innovation. These commenters expressed concern that regulation in this area could stifle innovation. For example, WSC stated, ‘‘a fixed form and process for invoices could stifle digital innovation to include initiatives to do business electronically, including automated invoices, use of block chain technology, and more broadly efforts to digitize the supply chain.’’ 23 Finally, VOCC commenters also stressed that implementation of these changes may prove difficult. These commenters noted that they have developed their own billing systems and because these systems must exchange information, any required changes would be significantly difficult.24 OCEMA noted that it is important for ‘‘the FMC to first consider technological feasibility, the scope and required time for systems development work that would be required to support any new requirements, and whether the proposed change would burden the ability to resolve items as part of a pre-pay process rather than a post-pay transaction.’’ 25 the Commission may already consider billing in evaluating demurrage and detention practices and so additional regulation was unnecessary.28 Commenters claimed that current Commission regulations adequately protect the industry. MTO commenters also noted the unique aspects of individual terminals. MTO commenters expressed concern about applying a ‘‘one size fits all’’ approach and cautioned the Commission about the unintended consequences and technological difficulties of pursuing this type of regulation.29 For example, the National Association of Waterfront Employees (NAWE) expressed concern that establishing billing requirements ‘‘will inevitably disrupt existing commercial relationships and could impact the competitiveness of MTOs that continue to face competition from neighboring foreign ports.’’ 30 Other MTO commenters shared this view and asserted that compliance with any changes would create administrative burdens that could worsen current supply chain issues.31 MTO commenters argued the costs of any new regulation would outweigh any benefits and cited technological limitations, international competition, and security concerns as reasons why the Commission should limit any regulation it decides to adopt.32 C. MTOs D. NVOCCs, Freight Forwarders, and Customs Brokers The Commission received comments from ten NVOCCs, freight forwarders, and customs brokers, and five trade organizations that represent such entities (collectively ocean transportation intermediary (OTI) The Commission received comments from an MTO and from three MTO trade organizations (collectively MTO commenters).26 Like VOCC commenters, MTO commenters generally argued against any new regulation, particularly if such regulation would apply to MTOs.27 One commenter observed that 22 See e.g., Doc. No. 78 at 2 (‘‘the FMC should not seek to right every perceived wrong or to balance every unfavorable commercial term in a contract by placing its thumb on the scales to balance the results of legitimate commercial negotiations.’’). 23 Doc. No. 61 at 3. 24 See e.g., Doc. No. 61 at 3 (‘‘Every carrier and every MTO has its own systems, and to the extent that those systems must exchange information (as would be the case for many of the data elements/ scenarios described in question 6 below), the complexity is multiplied by the required interactions between systems. Many of the billing systems involved are global systems, adding complexity to any required changes.’’). 25 Doc. No. 78 at 1–2. 26 Comments of the American Association of Port Authorities (Doc. No. 52); Comments of Maher Terminals LLC (Doc. No. 49); Comments of National Association of Waterfront Employers (Doc. No. 26); Comments of the Port of NY/NJ Sustainable Services Agreement (Doc. No. 68). 27 See e.g., Doc. No. 49 at 2. (‘‘Maher believes that the Shipping Act of 1984, as amended . . . , and the Commission’s regulations thereunder, particularly 46 U.S.C. 41102(c) and 46 CFR 545.4 PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 and 545.5, provide a sufficient and flexible legal framework for determining the reasonableness of MTO demurrage billing practices.’’) 28 Doc. No. 26 at 2 (noted that the Interpretive Rule expressly recognizes the multitude of varying factors that influence the reasonableness of demurrage and detention charges. See 46 CFR 545.5(f) (‘‘Nothing in this rule precludes the Commission from considering factors, arguments, and evidence in addition to those specifically listed in this rule.’’)). 29 See e.g., Doc. No. 26 at 2. 30 Doc. No. 26 at 2. 31 See e.g., Doc. No. 52 at 6–7 (‘‘Additional information may be attainable, but would demand ports engage in costly, administrative data collection. These efforts would significantly undermine streamlined operations at ports and terminals and in turn, generate substantial congestion and backlogs.’’). 32 See e.g., Doc. No. 52 at 10 (If ports are required to include extensive and detailed information on every billing, there is a national security risk that the aggregated data can be exploited by bad actors or competitors. Further, information regarding ports and terminal pricing, dwell times, and maritime practices risks the disclosure of business-sensitive proprietary information.). E:\FR\FM\14OCP1.SGM 14OCP1 62344 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS commenters).33 OTI commenters supported the Commission pursuing this regulation, but NVOCC commenters did not uniformly support applying any adopted regulation to NVOCCs.34 Most NVOCCs argued that the regulation should not apply to NVOCCs because NVOCCs do not determine demurrage or detention rates.35 Two NVOCCs indicated that the demurrage and detention billing requirements should apply to NVOCCs, but did not provide further explanation. However, one of these commenters stated that any new requirements that would apply to NVOCCs should differ from those that would apply to VOCCs because NVOCCs serve as an intermediary between the VOCCs and shippers.36 In contrast, freight forwarders and customs brokers indicated that any proposed demurrage and detention billing requirements should apply to VOCCs and NVOCCs equally as they both charge demurrage and detention fees.37 OTI commenters generally agreed on other questions posed in the ANPRM. For example, OTI commenters responded that the proposed regulations should apply to MTOs because they issue demurrage and detention charges.38 In addition, these commenters supported requiring billing 33 Comments of Combined Freight International KAM (Doc. No. 16); Comments of Lance Sales, Inc. (Doc. No. 20); Comments of A Custom Brokerage, Inc. (Doc. No. 70); Comments of the International Association of Movers (Doc. No. 74); Comments of J & K Fresh LLC (Doc. No. 29); Comments of the Los Angeles Customs Brokers and Freight Forwarders Association (Doc. No 83); Comments of Mode Transportation, LLC (Doc. No. 13); Comments of the National Customs Brokers & Forwarders Association of America, Inc. (Doc. No. 62); Comments of the New York New Jersey Foreign Freight Forwarders and Brokers Association, Inc. (Doc. No. 76); Comments of the Pacific Coast Council of Customs Brokers and Freight Forwarders (Doc. No. 82); Comments of Page International (Doc. No. 19); Comments of Mohawk Global Logistics Corporation (Doc. No. 69); Comments of Thunder Bolt Logistics, LLC (Doc. No. 77); Comments of the Transportation Intermediaries Association (Doc. No. 48); Comments of John S. Connor Global Logistics (Doc. No. 75). 34 One commenter did not support demurrage and detention billing requirements regulations to address the issues, but instead favored an industry solution. Doc. No. 20 at 1. 35 Doc. No. 16 at 1; Doc. No. 13 at 3; Doc. No. 69 at 3; Doc. No. 70 at 2; Doc. No. 75; Doc. No. 75 at 2; Doc. No. 76 at 2; Doc. No. 77 at 2. See Doc. No. 62 and Doc. No. 83 (both discuss the regulations as applying to VOCCs and MTOs as the billing parties). Some of these commenters stated that the regulations should apply to NVOCCs if they ‘‘mark up’’ the charge. Doc. No. 13 at 3; Doc. No. 69 at 3; Doc. No. 75 at 2; Doc. No. 76 at 2; Doc. No. 77 at 2. 36 Doc. No. 19 at 1; Doc. No. 48 at 3. 37 Doc. No. 29 at 1; Doc. No. 74 at 1. 38 Doc. No. 29 at 1; Doc. No. 74 at 1; Doc. No. 16 at 1; Doc. No. 13 at 4; Doc. No. 69 at 1; Doc. No. 70 at 2; Doc. No. 75 at 1; Doc. No. 62 at 4; Doc. No. 76 at 2; Doc. No. 19 at 1; Doc. No. 77 at 3; Doc. No. 48 at 3. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 parties to provide all information identified in Question 6 of the ANPRM as well as information on how to dispute charges to the billing party.39 Some OTI commenters stated that the Commission should also require billing parties to certify that the charges comply with the Shipping Act of 1984, as amended.40 These commenters were generally supportive of requiring billing parties to issue invoices within a specific timeframe (with most agreeing that the timeframe should be 30 days or less) and requiring billing parties to issue refunds within a specified timeframe.41 These commenters also stated that if the billing party invoices multiple parties, that the invoice should identify all billed parties and the basis for billing each. Furthermore, several commenters, especially customs brokers, asserted that they should not receive demurrage and detention invoices. For example, Los Angeles Customs Brokers and Freight Forwarders Association (LACBFFA) observed that shippers often name the customs broker as the ‘‘notify party’’ for customs purposes, and, as a result, custom brokers may receive demurrage or detention invoices.42 Such commenters argued that customs brokers should not receive invoices because they have no part in the transportation, negotiation, handling, or inland transport, and that the Commission should prohibit common carriers and MTOs from billing parties only shown as a notify party on the Bills of Lading.43 E. BCOs The Commission received comments from 26 BCOs and 15 trade 39 Doc. No. 29 at 2–3; Doc. No. 74 at 1; Doc. No. 82 at 1; Doc. No. 16 at 2–3; Doc. No. 13 at 5, 7; Doc. No. 69 at 5, 7–8; Doc. No. 70 at 3, 5; Doc. No. 75 at 3–4; Doc. No. 83 at 2; Doc. No. 62 at 4; Doc. No. 76 at 4–5; Doc. No. 19 at 2–3; Doc. No. 77 at 5, 7; Doc. No. 48 at 4–7. Question 6 requested comments on whether billing parties should be required to provide the following information on demurrage and detention invoices: Bill of lading number; container number; billing date; payment due date; start/end of free time; start/end of demurrage/detention/per diem clock; demurrage/ detention/per diem rate schedule; location of the notice of the charge (i.e., tariff, service contract number and section, or MTO schedule); container availability dates and vessel arrival dates for import shipments; for export shipments, the earliest return dates (and any modifications to those dates); any intervening clock-stopping events, and whether the charge is a pass-through of charges levied by the MTO or port. 87 FR at 8509. 40 See Doc. No. 77 at 5; Doc. No. 69 at 5; Doc. No. 75 at 3. 41 Doc. No. 29 at 3; Doc. No. 19 at 3; Doc. No. 77 at 7; Doc. No. 48 at 6; Doc. No. 82 at 2; Doc. No. 83 at 2; Doc. No. 62 at 5; Doc. No. 70 at 5; Doc. No. 69 at 7; Doc. No. 75 at 4; Doc. No. 16 at 3; Doc. No. 13 at 7. 42 Doc. No. 83 at 3. 43 Doc. No. 83 at 3; Doc. No. 82 at 2–3. PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 organizations that represent these entities (collectively BCO commenters).44 BCO commenters generally agreed on issues raised in the ANPRM. For example, BCO commenters responded that the regulations should apply to VOCCs, NVOCCs, and MTOs equally. The majority of BCO commenters stated that if the entity issued demurrage or detention charges, then the regulation should apply.45 BCO commenters cited the need for uniform requirements to apply to all demurrage and detention invoices they receive, regardless of whether the billing party is 44 Comments of the Agriculture Transportation Coalition (Doc. No. 84); Comments of the American Association of Exporters and Importers (Doc. No. 65); Comments of the American Chemistry Council (Doc. No. 54); Comments of the American Coffee Corporation (Doc. No. 73); Comments of Association of California Recycling Industries (Doc. No. 21); Comments of the Auto Care Association (Doc. No. 79); Comments of Bostock North America (Doc. No. 30); Comments of BassTech International (Doc. No. 72); Comments of Calpine Containers, Inc. (Doc. No. 50); Comments of Jean-Luc Carriere (Doc. No. 5); Comments of the Consumer Technology Association (Doc. No. 67); Comments of Lani Ellingsworth (Doc. No. 11); Comments of Flooring One Source (Doc. No. 3); Comments of Braun Export (Doc. No. 14); Comments of The Grape Company (Doc. No. 42); Comments of LG Electronics USA, Inc. (Doc. No. 44); Comments of The Meadows Group, LLC (Doc. No. 22); Comments of the Meat Import Council of America, North American Meat Institute, and U.S. Meat Export Federation (Doc. No. 64); Comments of National Association of Chemical Distributors (Doc. No. 58); Comments of National Association of Manufacturers (Doc. No. 55); Comments of the National Industrial Transportation League (Doc. No. 60); Comments of National Milk Producers Federation and U.S. Dairy Export Council (Doc. No. 43); Comments of the National Retail Federation (Doc. No. 53); Comments of the North American Home Furnishings Association (Doc. No. 80); Comments of David Oppenheimer and Company, I, LLC (Doc. No. 40); Comments of Pacific Trellis Fruit (Doc. No. 71); Comments of Pinnacle Fresh USA, LLC (Doc. No. 31); Comments of TBC Corporation (Doc. No. 6); Comments of Potential Industries, Inc. (Doc. No. 4); Comments of Sbrocco International, Inc. (Doc. No. 66); Comments of Sony Electronics Inc. (Doc. No. 37); Comments of Streamlight, Inc. (Doc. No. 35); Comments of Suntreat Packing & Shipping Co. (Doc. No. 38); Comments of The Toy Association (Doc. No. 41); Comments of Trelleborg Wheel Systems Americas, Inc. (Doc. No. 34); Comments of USA Rice (Doc. No. 28); Comments of Vivion, Inc. (Doc. No. 8); Comments of Westco Chemicals, Inc. (Doc. No. 36); Comments of Green Fresh Imports (Doc. No. 85); Comments of United Furniture Industries, Inc./Lane Home Furnishing (Doc. No. 86). 45 See e.g., Doc. No. 67 at 2 (‘‘[Consumer Technology Association] encourages the Commission to impose the same requirements as to minimum billing information on VOCCs, NVOCCs, and MTOs to facilitate industry-wide transparency.’’); Doc. No. 58 at 2 (‘‘[VOCCs, NVOCCs, and MTOs] all charge detention and demurrage fees, and [the National Association of Chemical Distributors] strongly recommends that each be included in any proposed detention and demurrage billing regulation.’’); Doc. No. 55 at 1– 2 (‘‘These requirements should apply to all parties that may be involved in submitting demurrage and detention bills to shippers and BCOs, including VOCCs, NVOCCs, and MTOs.’’). E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS a VOCC, NVOCC, or MTO. However, many of these BCOs preferred not to receive invoices from MTOs because they have no contractual relationship with the MTO.46 Several BCO commenters expressed the opposite view and supported a requirement that MTOs bill the BCO directly to avoid additional fees from VOCCs when they pass through such charges.47 BCO commenters generally supported requiring billing parties to provide all information identified in Question 6 of the ANPRM and information on how to dispute charges to the billing party. Specifically, BCO commenters cited that requiring such information would put the burden to support the charge on the carrier and would, hopefully, limit the need to dispute charges.48 They noted that the most helpful data to address disputed charges would be information related to stop-the-clock events, free time or charges applied when containers are not available for pickup, or when BCOs are unable to drop off containers at a terminal.49 BCO commenters asserted that having access to the type of information listed in the ANPRM would help them verify the charges.50 46 See e.g., Doc. No. 65 at 5 (‘‘Without a contractual connection between the MTO and the shipper, [American Association of Exporters and Importers] members don’t see how this would work, and forcing shippers to have a contractual agreement with an MTO is not a good idea.’’); Doc. No. 54 at 4 (‘‘Without a contractual connection between the MTO and the shipper, such a requirement would be unworkable.’’). Some BCO commenters noted, however, the invoice carriers send to shippers should identify the demurrage charges levied by the MTO to the carrier. See e.g., Doc. No. 84 at 5; Doc. No. 64 at 6. 47 See e.g., Doc. No. 41 at 4 (its members pay demurrage to MTOs and detention to the carriers); Doc. No. 53 at 4 (supported this practice because it would help avoid VOCCs charging more than MTOs charge); Doc. No. 28 at 3 (over half of its survey respondents supported MTOs charging demurrage directly to shippers). 48 See e.g., Doc. No. 64 at 5 (the minimum requirements would put ‘‘the burden on the common carrier to ensure more accurate, timely billing, which should, in theory, minimize superfluous charges and improve business practices.’’); Doc. No. 67 at 2 (minimum billing requirements ‘‘will promote transparency for all parties involved in shipping transactions, help ensure accountability, and deter unfair business practices[.]’’); Doc. No. 58 at 2 (‘‘A requirements for all relevant information . . . . would hold billing parties more accountable. It would prevent the VOCCs, NVOCCs, and MTOs from charging erroneous fees that shippers have little or no opportunities to contest.’’); Doc. No. 43 at 4 (‘‘Shippers need a full set of details about the containers subject to detention or demurrage charges to effectively assure they are properly assessed charges.’’). 49 Commenters report that most disputed charges include when free time starts and stops; countable days and whether the ‘‘clock stopping’’ events, such as there were no appointments, container was unavailable, terminal equipment, such as chassis, was unavailable, etc., should reduce the charges. 50 See e.g., Doc. No. 60 at 5 (including clock stopping events will ‘‘facilitate the carrier to fulfill VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 Some BCO commenters stated that the Commission should also require billing parties to certify that the charges comply with the Shipping Act of 1984, as amended.51 In addition, they also supported the requirement that if the billing party invoices more than one party, then the invoice must identify all billed parties and the basis for billing each party. BCO commenters were generally supportive of requiring billing parties to include specific information regarding how the billed party may dispute a charge. Specifically, they supported requiring billing parties to provide contact information for disputes and instructions on how to file disputes or information applicable to the dispute process, such as when a charge may be waived or what documentation the billed party must submit with its request.52 Many BCO commenters supported requiring billing parties to issue demurrage or detention invoices within 60 days of when the charges stop accruing; many commenters supported a timeframe of 30 days or less.53 As discussed below, BCO commenters supported a shorter timeframe for issuing demurrage and detention invoices because it is more likely that billed parties will have the information and documents necessary to verify the charges. They also complained that demurrage and detention invoices arrive months after the charges accrued and that billed parties lacked the documentation necessary to verify the charge due to passage of time. F. Motor Carriers The Commission received comments from six motor carriers and four motor carrier trade organizations (collectively Motor Carrier commenters).54 For the their responsibility to bill demurrage and detention charges to meet the incentivizing principle[.]’’); Doc. No. 22 at 2–3 (omission of event that should stop the clock from invoices ‘‘makes it impossible for shippers to verify whether they are actually accounted for when the final total is calculated.’’); Doc. No. 8 at 2 (omission of minimum information ‘‘makes it extremely difficult for shippers to be able to verify the amount charged are correct.’’). See also Doc. No. 3 at 2; Doc. No. 44 at 2; Doc. No. 40 at 2; Doc. No. 35 at 2; Doc. No. 34 at 2; Doc. No. 64 at 5; Doc. No. 58 at 2; Doc. No. 55 at 2; Doc. No. 43 at 4. 51 See e.g., Doc. No. 65 at 4; Doc. No. 84 at 4; Doc. No. 43 at 5. 52 See e.g., Doc. No. 60 at 8; Doc. No. 28 at 3; Doc. No. 53 at 5; Doc. No. 43 at 5; Doc. No. 64 at 7; Doc. No. 67 at 6; Doc. No. 84 at 5; Doc. No. 21 at 4; Doc. No. 54 at 5; Doc. No. 79 at 5. 53 A more detailed discussion of the timeframes supported by specific commenters is found in section IV.C.1, which discusses the proposed timeframe for billing parties to issue demurrage and detention invoices. 54 Comments of Association of Bi-State Motor Carriers (Doc. No. 51); Comments of Harbor PO 00000 Frm 00032 Fmt 4702 Sfmt 4702 62345 most part, the Motor Carrier commenters expressed similar views as the BCO commenters. For example, the Motor Carrier commenters generally supported applying the demurrage and detention billing requirements to VOCCs, NVOCCs, and MTOs; requiring billing parties to provide all information listed in the ANPRM; requiring billing parties to identify all billed parties and the basis for each billed party; and requiring billing parties to issue invoices within a specific timeframe. In addition, the Motor Carrier commenters expressed concern that billing parties frequently invoiced motor carriers, who have no contractual relationship with the billing parties. For example, the Association of Bi-State Motor Carriers (Bi-State) argued that ‘‘motor carriers are not privy to the specifics of the contractual agreements between the shipper and billing parties, and should not be dragged into billing disputes.’’ 55 However, Bi-State noted that billing parties sometimes threatened to prevent motor carriers from picking up or dropping off containers due to disputes with one of the motor carrier’s customers.56 As a result, Motor Carrier commenters alleged that they must cover the disputed charges in order to serve their other customers.57 Accordingly, the Motor Carrier commenters encouraged the Commission to adopt an approach that would require the billing party to bill the customers (BCOs or shippers) directly, as they are the parties who have a contractual relationship with the billing parties.58 As a result they said, motor carriers would no longer be responsible to pay such charges or risk business relationships with their other customers if one customer disputes those charges. III. Ocean Shipping Reform Act of 2022 After the Commission issued the ANPRM and received comments, on June 16, 2022, the President signed the Trucking Association (Doc. No. 33); Comments of MTI, Inc. (Doc. No. 46); Comments of Golden State Logistics (Doc. No. 59); Comments of IMC Companies (Doc. No. 7); Comments of Intermodal Association of North America (Doc. No. 24); Comments of Intermodal Motor Carriers Conference (Doc. No. 47); Comments of William H. Kopke Jr. Inc. (Doc. No. 56); Comments of Marine Container Services LLC (Doc. No. 45); Comments of 1634, A Florida LLC (Doc. No. 15). 55 Doc. No. 51 at 2. 56 Doc. No. 51 at 2. 57 Doc. No. 51 at 2; Doc. No. 47 at 2, 3. 58 See e.g., Doc. No. 51 at 1 (VOCCs should bill shippers directly); Doc. No. 47 at 2 (supported MTOs billing shippers directly because motor carriers ‘‘are not aware of separate contractual arrangements.’’); Doc. No. 33 at 8 (their members indicated that demurrage and detention should be billed directly to contracting party). E:\FR\FM\14OCP1.SGM 14OCP1 62346 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS Ocean Shipping Reform Act of 2022 (OSRA 2022) into law.59 In OSRA 2022, Congress amended various statutory provisions contained in Part A of Subtitle IV of Title 46, U.S. Code. Specifically, OSRA 2022 prohibits common carriers from issuing an invoice for demurrage or detention charges unless the invoice includes specific information to show that the charges comply with part 545 of title 46, Code of Federal Regulations and applicable provisions and regulations.60 OSRA 2022 then lists the minimum information that common carriers must include in a demurrage or detention invoice: (A) date that container is made available. (B) the port of discharge. (C) the container number or numbers. (D) for exported shipments, the earliest return date. (E) the allowed free time in days. (F) the start date of free time. (G) the end date of free time. (H) the applicable detention or demurrage rule on which the daily rate is based. (I) the applicable rate or rates per the applicable rule. (J) the total amount due. (K) the email, telephone number, or other appropriate contact information for questions or requests for mitigation of fees. (L) a statement that the charges are consistent with any of Federal Maritime Commission rules with respect to detention and demurrage. (M) a statement that the common carrier’s performance did not cause or contribute to the underlying invoiced charges.61 Failure to include the required information on a demurrage or detention invoice eliminates any obligation of the billed party to pay the applicable charge.62 In addition, OSRA 2022 also authorizes the Commission to revise the minimum information that common carriers must include on demurrage or detention invoices in future rulemakings. The Commission addresses this minimum information in this proposed rule.63 OSRA 2022 requires the Commission to initiate a rulemaking further defining prohibited practices by common carriers, marine terminal operators, 59 Public Law 117–146, 136 Stat. 1272 (2022). Law 117–146 at Sec. 7(a)(1), 136 Stat. at 1274 (codified at 46 U.S.C. 41104(a)(15)). 61 Public Law 117–146 at Sec. 7(a)(2), 136 Stat. at 1275 (codified at 46 U.S.C. 41104(d)(2)). 62 Public Law 117–146 at Sec. 7(a)(2), 136 Stat. at 1275 (codified at 46 U.S.C. 41104(f)). 63 Public Law 117–146 at Sec. 7(a)(2), 136 Stat. at 1275 (codified at 46 U.S.C. 41104(d)(2)). 60 Public VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 shippers, and OTIs regarding the assessment of demurrage or detention charges.64 OSRA 2022 also provides that such rulemaking must ‘‘only seek to further clarify reasonable rules and practices related to the assessment of detention and demurrage charges to address the issues identified in the final rule published on May 18, 2020, entitled ‘Interpretive Rule on Demurrage and Detention Under the Shipping Act’ (or successor rule)[.]’’ 65 Specifically, the Commission’s rulemaking must clarify ‘‘which parties may be appropriately billed for any demurrage, detention, or other similar per container charges.’’ 66 The Commission offers that clarification in this proposed rule. IV. Discussion of Proposed Rule A. General Provisions 1. Purpose of Rule This proposed rule would (1) adopt minimum information that common carriers must include in a demurrage or detention invoice that is listed in 46 U.S.C. 41104(d)(2); (2) add to this list additional information that must be included in or with a demurrage or detention invoice; (3) further define prohibited practices by clarifying which parties may be appropriately billed for demurrage or detention charges; and (4) establish billing practices that billing parties must follow when invoicing for demurrage or detention charges. 2. Scope and Applicability This subpart sets forth regulations governing any invoice issued by an ocean common carrier, MTO, or NVOCC to a billed party or their designated agent for the collection of demurrage or detention charges. This regulation does not govern the billing relationships among and between ocean common carriers and MTOs. As a preliminary matter, the Commission sought comment on to whom this rule should apply. Specifically, the Commission asked whether NVOCCs and MTOs should be bound by the requirements of the rule. The majority of commenters supported applying the rule to both NVOCCs and MTOs. The Commission has determined that the proposed rule would apply to MTOs and NVOCCs, as well as VOCCs, but will not regulate the billing arrangements between VOCCs and MTOs for the reasons discussed below. 64 Public Law 117–146 at Sec. 7(b)(1), 136 Stat. at 1275. 65 Public Law 117–146 at Sec. 7(b)(2), 136 Stat. at 1275 (emphasis added). 66 Public Law 117–146 at Sec. 7(b)(2), 136 Stat. at 1275. PO 00000 Frm 00033 Fmt 4702 Sfmt 4702 a. Inclusion of NVOCCs Fact Finding No. 29 recommended that the Commission regulate the demurrage and detention billings and billing practices of both common carriers and MTOs.67 In its opening question to the ANPRM’s list of requested information, the Commission asked if both NVOCCs and VOCCs should be included in the regulation.68 Most commenters supported applying the regulations to NVOCCs. Generally, these commenters noted the importance of consistency across the industry and the need for everyone to adhere to uniform standards.69 As described by the WSC, ‘‘[t]he need for predictable and clear billing does not change on the basis of whether the billing entity does or does not operate ships—the distinction between VOCCs and NVOCCs. The customer benefits of transparent and timely billing apply equally in both instances[.]’’ 70 Few commenters opposed applying any proposed billing requirements to NVOCCs. The most common objection was that NVOCCs do not control any physical assets (i.e., equipment or land) to be subject to the rule and that usually NVOCCs treat demurrage and detention charges as a pass-through cost.71 One commenter noted that because a NVOCC has to pay a VOCC or MTO for these types of charges, an NVOCC has no reason to hold back sending an invoice to a BCO because that will leave the NVOCC with outstanding charges to the carrier.72 Although most NVOCCs are only passing through charges to BCOs, that does not change the fact that some NVOCCs invoice BCOs for demurrage and detention.73 BCOs employing an 67 Fact Finding No. 29 Interim Report at 6. FR at 8509. 69 See e.g., Doc. No. 29 at 1 (stressed that ‘‘there must be uniformity (One rule for demurrage and detention billing, no matter who bills it.)’’); Doc. No. 60 at 3 (‘‘[BCOs] are entitled to receive timely, accurate and explanatory billing from their contracted carrier whether the carriage is contracted pursuant to a bill of lading issued by an NVOCC or by a VOCC.’’). 70 Doc. No. 61 at 4. 71 See e.g., Doc. No. 69 at 3 (‘‘NVOCCs do not generally file [demurrage and detention] schedules in their tariffs and do not generate [demurrage and detention] charges on their own. Instead, [these] charges originate with VOCCs and MTOs, and are merely passed through by NVOCCs as facilitators of the transaction.’’). 72 Doc. No. 13 at 4 (‘‘there is no logic in the NVOCC unreasonably delaying billing or notifying the customer. The NVOCC is the party who is being billed by the carrier/terminal and will have the outstanding payables due to the carrier, so clearly, there is no general logic that encourages them to delay billing to their end customer.’’). 73 NVOCCs may also issue invoices that charge demurrage or detention based on their own tariff rules or negotiated rates. In addition, NVOCCs may 68 87 E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules NVOCC generally do not interact with VOCCs and, as a result, the demurrage or detention invoice BCOs receive from an NVOCC may be their only notice about the origin and breakout of these charges. Additionally, because of its contractual relationship with the BCO, an NVOCC is often the only party in this transaction able to inform BCOs as to the nature of these charges. Furthermore, there is a greater need for transparency when the NVOCCs markup demurrage or detention charges assessed by VOCCs or MTOs or when NVOCCs charge demurrage or detention based on their own tariff rules or negotiated agreements. Ultimately, this regulation is an outgrowth of the work done in Fact Finding No. 29. As noted in the Final Report, ‘‘[t]hroughout the Fact Finding, industry members reported confusion about the information contained in invoices.’’ 74 As discussed below, the intent of this rulemaking is to ensure that the person receiving the bill understands the charges regardless of whether the billing party is a VOCC, NVOCC, or an MTO.75 b. Inclusion of MTOs jspears on DSK121TN23PROD with PROPOSALS MTOs often do not have direct contractual relationships with shippers. Instead, MTOs usually have contractual relationships with VOCCs, such as through terminal services agreements.76 However, an MTO may separately assess demurrage as an implied contract in a court of law, provided that demurrage rates are published as part of the MTO’s rate schedule.77 Commenters overwhelmingly argued that the proposed rule should apply to MTOs. Again, while the most common practice is for the MTO to invoice the VOCC and the VOCC to send a combined invoice to the shipper, several commenters also noted that in some cases MTOs bill shippers directly.78 MTOs were generally opposed to the proposed regulations, citing that traditionally they do not invoice also mark-up the demurrage or detention charge assessed by a VOCC or MTO. 74 Fact Finding Investigation 29: Final Report at 51 (May 31, 2022) (Fact Finding 29 Final Report), available at: https://www.fmc.gov/wp-content/ uploads/2022/06/FactFinding29FinalReport.pdf. 75 See Fact Finding 29 Interim Recommendations at 6 (recommending a rulemaking on demurrage and detention billing requirements so that the person receiving the bill understands ‘‘what is being billed and by whom.’’). 76 See 46 CFR 535.309. 77 46 U.S.C. 40501(f); 46 CFR 525.2. 78 See e.g., Doc. No. 61 at 4 (‘‘MTOs can and do bill for demurrage, and there are multiple business models at ports around the country under which carriers bill on behalf of MTOs and vice versa.’’) VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 shippers directly, but instead work with VOCCs.79 The Commission’s primary concern with this proposed regulation is to ensure billed parties understand the demurrage or detention invoices they receive. Although, at least under the traditional process, it appears that MTOs rarely interact with anyone other than the VOCC, in those cases where an MTO invoices a shipper, the MTO should be subject to the same regulations that apply to VOCCs and NVOCCs. c. MTO and VOCC Relationships This proposed regulation does not govern the billing relationships among and between VOCCs and MTOs. As noted earlier, the purpose of the proposed rule is to identify the minimum information billing parties must include on demurrage and detention invoices, and to improve the invoices’ clarity. Although the Fact Finding No. 29 Final Report noted that shippers reported confusion about information contained in demurrage and detention invoices, the Fact-Finding Officer did not receive similar concerns from VOCCs about invoices they were receiving from MTOs.80 The ANPRM specifically asked whether the proposed regulation should apply to the format in which MTOs bill VOCCs.81 Most OTI, BCO, and Motor Carrier commenters answered this question by discussing invoices they receive from carriers and the need to have charges originating from an MTO and charges originating from a VOCC distinguished.82 This fact suggests that the primary concern that needs to be addressed in this proposed regulation is not the billing interactions between MTOs and VOCCs, but rather transparency and clarity on invoices issued to OTIs, shippers, and motor carriers. Further, many MTOs and MTO trade organizations also argued that regulations in this realm were not warranted. For example, the NAWE explained, ‘‘[t]he unique commercial relationships negotiated between 79 See e.g., Doc. No. 49 at 2; Doc. No. 26 at 3. Finding 29 Final Report at 51. See e.g., Coalition for Fair Port Practices Petition for Rulemaking, FMC Docket No. P4–16, (Dec. 7, 2016); Fact Finding Investigation No. 28: Final Report, (Sep. 4, 2018), available at: https://www2.fmc.gov/ readingroom/docs/FF%20No.%2028/FF28_int_ rpt2.pdf/. 81 87 FR at 8509. 82 See e.g., Doc. No. 37 at 2 (noted that ‘‘charges should be properly distinguished and identified so that by reviewing a bill the invoiced party can determine which charges are being passed along by VOCCs and which charges are being billed directly to the invoiced party in the first instance.’’). 80 Fact PO 00000 Frm 00034 Fmt 4702 Sfmt 4702 62347 VOCCs and MTOs have not been the source of demurrage complaints.’’ 83 Other commenters cited the close commercial relationship shared by MTOs and VOCCs, which, they argued, made additional regulation unnecessary.84 The Commission received a few comments from VOCCs who favored extending regulations to cover the invoicing from MTOs to VOCCs. These comments were generally about maintaining accurate information throughout the process.85 VOCC commenters stressed the importance of applying consistent information requirements at each stage in the supply chain.86 Notwithstanding the comments from OCEMA and WSC, the Commission has not received comments responding to the ANPRM or elsewhere that expressed concerns about the relationships or interactions between VOCCs and MTOs that warrant regulating the format used by MTOs to bill VOCCs. The Commission notes the strong commercial relationships between MTOs and VOCCs and is confident that these current contractual relationships will continue to ensure that the proper information is shared and that the party who ultimately receives the invoice is receiving accurate information. Thus, the Commission concludes that at this time it is not necessary to impose minimum billing information requirements for MTO invoices issued to VOCCs. 83 Doc. No. 26 at 3. See Doc. No. 60 at 3 (‘‘the assessment of the terms and charges by [MTOs] on [VOCCs] has not so far been a part of the scope of Fact Finding Investigation 28’’); Doc. No. 49 at 3 (‘‘Maher has not received any feedback from its carrier customers and other Terminal users that its free time and demurrage policies and practices are unclear or confusing, or that further regulations are necessary to improve clarity with respect to such policies and practices.’’). 84 Doc. No. 49 at 3 (‘‘The Commission should not adopt a demurrage billing regulation that includes MTOs, let alone one that regulates the format in which MTOs charge demurrage to VOCCs. To the extent that Maher charges demurrage directly to its VOCC customers, as opposed to other Terminal users, those arrangements are set forth in privately negotiated, arms-length terminal service agreements, which are subject to tailored governing law and dispute resolution provisions.’’). 85 Doc. No. 61 at 4 (‘‘It would be impractical if charges originating with MTOs, but potentially collected by common carriers, were not subject to the same minimum standards regarding included information. To the extent that a charge may be handled by multiple parties—whether on an agency basis or as a pass-through—it is critical that the relevant information be available to all parties in the chain.’’). 86 See e.g., Doc. No. 78 at 3 (‘‘OCEMA has no position on this issue at this time. However, OCEMA stresses the importance of consistency and transparency throughout the supply chain with respect to any information requirements imposed on VOCCs.’’). E:\FR\FM\14OCP1.SGM 14OCP1 62348 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules 3. Definitions a. Demurrage or Detention For purposes of this proposed rule, the Commission defines the terms ‘‘demurrage or detention’’ broadly to include any charge assessed by common carriers and marine terminal operators related to the use of marine terminal space or shipping containers. This proposed definition is the same as the scope used in 46 CFR 545.5(b). The goal is to encompass all charges having the purpose or effect of demurrage or detention regardless of the labels given to those charges. Under this definition, for instance, a charge assessed by a common carrier for the use of containers outside a marine terminal would fall within the scope of this rule regardless of whether the charge was called ‘‘detention’’ or ‘‘per diem.’’ Similarly, a charge assessed because a container is taking up terminal space would fall within the scope of this rule even if the billing party called the charge something other than ‘‘demurrage.’’ Like the scope denoted in 46 CFR 545.5, the proposed rule specifically limits these definitions to ‘‘shipping containers’’ and excludes charges related to other equipment, such as chassis, because depending on the context, ‘‘per diem’’ can refer to containers, chassis, or both. As previously expressed during the Commission’s interpretive rulemaking at 46 CFR 545.5, the Commission supports defining demurrage and detention charges based on what asset is the source of the charge (land or container) as opposed to the location of a container (inside or outside a terminal).87 In that prior rulemaking, the Commission discouraged use of terms such as ‘‘storage’’ and ‘‘per diem’’ as synonyms for demurrage and detention because these terms add additional complexity. The Commission reiterates those statements here and notes that, despite how it may be used in the industry, to ensure clarity the Commission generally favors using the term ‘‘per diem’’ to refer to the use of chassis. jspears on DSK121TN23PROD with PROPOSALS b. Demurrage or Detention Invoice The Commission proposes to broadly defining the term ‘‘demurrage or detention invoice’’ as meaning any statement, printed, written, or accessible online, that documents an assessment of demurrage or detention charges. By proposing a broad definition, the Commission intends the definition to include the existing variety of methods 87 Interpretive Rule on Demurrage and Detention Under the Shipping Act Final Rule, 85 FR 29638, 29666 (May 18, 2020) (codified at 46 CFR 545.5). VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 employed by common carriers and MTOs to invoice shippers, and to leave room for improvement of existing systems or adopting of any new, innovative invoicing methods. The Commission received a few comments asking it to institute requirements on how invoices are displayed or presented to shippers.88 Although there are a variety of existing methods to display and deliver this information, the Commission does not perceive a problem necessitating a regulatory solution at this time. The Commission intends the proposed definition to encompass the many existing and potential future methods that a bill might be presented and does not indicate a preference or requirement. c. Billed Party The Commission is proposing to define ‘‘billed party’’ as meaning the person receiving the demurrage or detention invoice and who is responsible for the payment of any incurred demurrage or detention charge. In the Commission’s view, this proposed definition would best capture the intended scope of this term and eliminate any potential ambiguity as to its coverage. d. Billing Party This proposed rule would define the term ‘‘billing party’’ as meaning the VOCC, NVOCC, or MTO who issues a demurrage or detention invoice. The Commission acknowledges that, currently, in most circumstances the billing party will be a VOCC. For purposes of this proposed rule, this term is defined broadly to incorporate the occasions when an MTO or an NVOCC may issue a demurrage or detention invoice. e. Billing Dispute The term ‘‘billing dispute’’ would mean any disagreement with respect to the validity of the charges, or the method of their invoicing raised by the billed party or their agent to the billing party. This proposed definition, and more generally, this proposed rule, does not indicate a preference or requirement for the format in which a dispute may be raised. Instead, the Commission proposes a broad definition that incorporates all types of disputes raised 88 See e.g., Doc. No. 62 at 4–5 (‘‘One way to make invoices more accessible is to provide recipients with a digital copy of the invoice (for example, through an electronic portal or online source) rather than solely by hardcopy.’’); Doc. No. 81 at 2 (‘‘Invoices should be readily available (i.e. online) so NVOCCs can provide statements to their customers.’’). PO 00000 Frm 00035 Fmt 4702 Sfmt 4702 by a billed party upon receiving a demurrage or detention invoice. 4. Properly Issued Invoices OSRA 2022 directs the Commission to initiate a rulemaking that seeks to ‘‘further clarify reasonable rules and practices related to the assessment of detention and demurrage charges[.]’’ 89 Specifically, OSRA 2022 instructs the Commission to address ‘‘which parties may be appropriately billed for any demurrage, detention, or other similar per container charge.’’ 90 Under the proposed rule, a properly issued invoice is an invoice that is only issued to the person that has contracted with the billing party for the carriage of goods or space to store cargo, and is therefore the person responsible for the payment of any incurred demurrage or detention charge. This is often the shipper of record. The proposed rule would prohibit billing parties from issuing demurrage and detention invoices to persons other than the person for whose account the billing party provided ocean transportation or storage. As a result of anecdotal reports indicating that billing parties sometimes sent invoices to multiple parties for the same shipments, the Commission asked whether this practice occurred regularly.91 Many commenters described a current, wide-spread practice where the billing party sends the invoice to multiple parties, most of whom are not the recipient of the service giving rise to the invoiced charge.92 The current system, in which parties who did not negotiate contract terms with the billing party are nonetheless bound by them, creates additional confusion and hardship and exacerbates problems in the supply chain. For example, one commenter noted that this practice often results in disputes among the parties.93 Other commenters noted that invoicing multiple parties results in duplicative payments, which further complicates resolving invoice disputes.94 Although the Commission did not specifically request comments on prohibiting billing parties from 89 OSRA 2022, Section 7(b)(2). 2022, Section 7(b)(2). 91 87 FR at 8508–8509. 92 See e.g., Doc. No. 44 at 3; Doc. No. 37 at 2; Doc. No. 19 at 2; Doc. No. 15 at 3; Doc. No. 13 at 5–6; Doc. No. 8 at 3; Doc. No. 47 at 6; Doc. No. 48 at 5. 93 Doc. No. 53 at 4. 94 Doc. No. 28 at 2 (‘‘According to most survey respondents, common carriers invoice multiple parties for demurrage and/or detention charges sometimes resulting in duplicative payments’’); Doc. No. 13 at 6 (‘‘We also see invoices being sent on the same container to multiple parties, and at times, it is paid more than once[.]’’). 90 OSRA E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS invoicing anyone except the party who contracted for the service (usually the shipper), the Commission received many comments urging it to adopt such regulations.95 Commenters expressed frustration at the practice of billing demurrage and detention charges to parties who have not agreed to the charges or are not otherwise liable.96 Other commenters suggested that common carriers bill third parties to shield customer relationships.97 Commenters who supported such a regulation generally agreed with the concept that only the parties to the contract (usually the shipper and common carrier), have insight into the contractual agreements between the shipper and common carrier.98 Because third parties lack direct involvement and information, most would not be privy to the demurrage and detention terms negotiated by the parties to the original contractual agreement, and therefore are at a disadvantage if pulled into a dispute over such charges. One specific instance where not being a party to the contract is a disadvantage is in determining free time. As one commenter explained: ‘‘Motor carriers are not a party to contracts and may not be aware of contractual allowances for free time. Yet motor carriers receive these invoices and are then responsible for working with ocean carriers and shippers to determine which contract the shipment was under and whether it allowed for additional free time beyond what has been billed.’’ 99 Other commenters also described the difficulty of verifying the accuracy of charges when they were not party to the agreements that determine the allotted free time.100 95 See e.g., Doc. No. 82 at 4; Doc. No. 56 at 3; Doc. No. 33 at 3; Doc. No. 51 at 1. 96 See e.g., Doc. No. 84 at 5 (‘‘The carrier may not invoice a party merely because the carrier has expanded the list of parties which it includes as a merchant in its B/L’’). 97 See Doc. No. 82 at 4 (‘‘The carriers are billing the party of least resistance. It appears the first and easiest choice under the ‘‘Merchant Clause’’ is to bill the US customs broker on import shipments as there would be minimal effort on the carrier’s part (since the carrier’s shipper may be based overseas), and the carrier prefers to avoid imposing detention/ demurrage on a current or future customer BCO. Instead, the carrier lawyers pursue a small US customs broker with whom the carrier has not had, and likely will never have, any commercial relationship.’’). 98 Doc. No. 51 at 1 (‘‘Members feel strongly that the VOCC should bill the customers directly, as they are the parties who formed the agreement. This would remove the drayage carrier from the equation, reduce confusion, and keep the business relationships clear.’’). 99 Doc. No. 47 at 2. 100 See Doc. No. 33 at 3 (‘‘If a motor carrier is paying demurrage, it is impossible to know if the VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 The Commission understands the concerns with invoices being sent to those individuals without a contractual relationship and acknowledges that this practice exacerbates dispute resolution and efficient movement of cargo. As was pointed out in the Final Report of the Supply Chain Innovation Team Initiative, the ‘‘United States international supply chain is a complex, dynamic ecosystem’’ and the ‘‘lack of direct customer relationships between actors in this system (such as shippers and terminals) impedes cooperative problem-solving, exacerbates disruptions . . . and makes recovering from disruptions more difficult[.]’’ 101 This is exactly the case here where motor carriers, custom brokers, and others who do not have customer relationships with common carriers are being asked to resolve disputes. Many commenters also acknowledged the value of commercial relationships within the system. For example, many commenters opposed requiring MTOs to bill shippers directly because of a lack of direct commercial relationship.102 Other commenters cited the value of the existing relationships between MTOs and VOCCs and the benefit it brings to the supply chain. For example, the National Industrial Transportation League noted, ‘‘[t]he commercial relationship between [VOCCs] and their MTO partners should be valued for its ability to bring benefit to the ocean delivery system and, by extension, to the shipping public in a way that the transactional relationship between [BCOs] and [MTOs] cannot.’’ 103 Parties involved in a continuous commercial relationship have made an investment in that relationship and are highly motivated to timely and effectively billing is accurate since the motor carrier is not party to the contractual arrangements and agreed upon free time. On detention and per diem, since Motor Carriers are in possession of the containers under the interchange, they are constantly surveying the restrictions that exist for return of the container. However, motor carriers are still not party to the contract and subsequent free time agreements and therefore must work with shippers to determine which contract the shipment was under and if there was additional free time available from what was billed. This is another reason why only billing between contracting parties should be allowed. Motor carriers are not party to these contracts and therefore should not be billed.’’). 101 Supply Chain Innovation Initiative: Final Report at 3 (Dec. 5, 2017), available at: https:// www.fmc.gov/assets/1/Page/SCITFinalReportreduced.pdf. 102 See e.g., Doc. No. 52 at 8 (‘‘Ports and MTOs do not bill directly to shippers or cargo owners; their strongest relationship lies with ocean carriers, whom they enter into contracts and interface with daily.’’); Doc. No. 54 at 4 (‘‘Without a contractual connection between the MTO and the shipper, such a requirement would be unworkable.’’). 103 Doc. No. 60 at 6. See Doc. No. 72 at 6. PO 00000 Frm 00036 Fmt 4702 Sfmt 4702 62349 resolve problems as they arise in order to maintain a mutually beneficial, ongoing relationship. The Commission believes that prohibiting billing parties from issuing demurrage and detention invoices to persons with whom they do not have a genuine commercial relationship will similarly benefit the supply chain. If the billed party has firsthand knowledge of the terms of its service contract with a common carrier, then they are in a better position to ensure that both they and the carrier are abiding by those terms. When demurrage or detention invoice disputes do arise, the billed party is in a better position than third parties such as truckers and customs brokers to analyze the accuracy of the charge. Further, when the billed party disputes a charge, they have an existing commercial relationship with the billing party and are in a better position to resolve the dispute. Practically, the proposed rule would prohibit billing parties from invoicing motor carriers or customs brokers. If adopted, the proposed rule would not prevent motor carriers from paying on behalf of the billed party. Although a motor carrier could pay on behalf of a billed party, the motor carrier would not be liable for these charges and could not be penalized for nonpayment of charges. Although this arrangement is different from many of the billing systems currently employed, it would not be unprecedented. During Fact Finding Investigation No. 28, the Commission sought information on how contractual relationships, policies, and practices regarding demurrage and detention in the United States differ from those in other maritime nations. The Commission received information that, in other nations, VOCCs collect demurrage and detention charges (often combined), directly from shippers rather than motor carriers.104 Under the proposed rule, only the person who contracted with the common carrier for the carriage or storage of goods may be issued an invoice. The Commission is aware that there are a variety of shipping arrangements that allocate risks, obligations, and costs between the shipper and the consignee named on the bill of lading. Considering these arrangements, the Commission is specifically seeking comment on whether it would be appropriate to also include the consignee named on the bill of lading as another person who may 104 Fact Finding Investigation No. 28 Final Report at 3, Fed. Mar. Comm’n (Sep. 4, 2018), available at: https://www2.fmc.gov/readingroom/docs/ FF%20No.%2028/FF28_int_rpt2.pdf/. E:\FR\FM\14OCP1.SGM 14OCP1 62350 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules receive a demurrage or detention invoice. Including the consignee named on the bill of lading as an appropriately billed party for demurrage or detention charges in the Commission’s proposed rule would memorialize an existing industry practice and allow the common carrier to bill either the person who contracted for the shipment of the cargo or consignee named on the bill of lading. In sum, the proposed rule should simplify the current system and ensure that only the person with the most knowledge about the shipment and who is in the best position to understand and dispute the charge receives a demurrage or detention invoice. 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. Therefore, the proposed rule would prohibit such a practice and require that only the person that has contracted with the billing party for the carriage or storage of goods receive an invoice for incurred demurrage or detention charges. jspears on DSK121TN23PROD with PROPOSALS B. Required Billing Information In the ANPRM, the Commission requested comment on the minimum information that should be required on billings.105 Specifically, the ANPRM requested comment on whether it should require demurrage and detention invoices to include information necessary to identify the shipment (bill of lading number, container number, etc.); information on how the chargers were calculated (container availability date, vessel arrival dates for import shipments and earliest return date for export shipments, etc.); and information on events that justify stopping the clock on charges (e.g., container unavailability, lack of return locations, lack of appointments, other force majeure reasons).106 An overwhelming number of commenters supported the Commission requiring all of the information listed under Question 6 of the ANPRM. However, a small number of commenters opposed such a requirement. For example, NAWE, American Association of Port Authorities, and Port of NY/NJ Sustainable Services Agreement commented that some information listed in the ANPRM may be extremely burdensome or impossible to 105 87 106 87 FR at 8508–8509. FR at 8508. See Question 6, 87 FR at 8509. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 provide.107 In addition, Maher believed that marine terminals should provide basic information on demurrage charges but did not support requiring one-sizefits-all billing information.108 OSRA 2022 requires common carriers to include the following information on demurrage and detention invoices: the date that the container is made available; the port of discharge; the container number or numbers; for exported shipments, the earliest return date; the allowed free time in days; the start date of free time; the end date of free time; the applicable detention or demurrage rule on which the daily rate is based; the applicable rate or rates per the applicable rule; the total amount due; the email, telephone number, or other appropriate contact information for questions or requests for mitigation of fees; a statement that the charges are consistent with any of Federal Maritime Commission rules with respect to detention and demurrage; and a statement that the common carrier’s performance did not cause or contribute to the underlying invoiced charges.109 The proposed rule would require common carriers and MTOs to include all the information required in 46 U.S.C. 41104(d)(2), listed above on demurrage or detention invoices. The proposed rule also would require billing parties to include minimum information in addition to the information listed in 46 U.S.C. 41104(d)(2) to include specific identifying, timing, rate, and dispute resolution information, discussed in detail below. The Commission requests comments on whether it should require billing parties to include all the proposed information in demurrage and detention invoices. If the commenter opposes any of the proposed requirements, they should identify the information and the obstacles or burden to including such information on demurrage or detention invoices. If the commenter supports the proposed required information, they should explain how the specific information will assist them in verifying the accuracy of the charge or ascertaining how the charge was calculated. 1. Identifying Information Under the proposed rule, the invoice must contain sufficient information to enable the billed party to identify the container(s) to which the charges apply, including: the bill of lading number(s); the container number(s); for imports, the 107 Doc. No. 26 at 5; Doc. No. 52 at 7; Doc. No. 68 at 1. 108 Doc. No. 49 at 3. 109 Public Law 117–146 at Sec. 7(a)(2), 136 Stat. at 1275 (codified at 46 U.S.C. 41104(d)(2)). PO 00000 Frm 00037 Fmt 4702 Sfmt 4702 port(s) of discharge; and the basis for why the invoiced party is the proper party of interest and thus liable for the charge. OSRA 2022 requires that invoices include the port of discharge and the container number.110 The proposed rule clarifies that billing parties must only include ports of discharge for import shipments because providing the port of discharge on a demurrage or detention invoice would be less useful in the context of export shipments. The proposed rule would also require billing parties to include the bill of lading number and the basis for why the billed party was invoiced. Commenters expressed support for requiring billing parties to include the container number, bill of lading number, and basis for why the billed party is the proper party in interest. The ANPRM did not request comments on whether the invoice should include the port of discharge for import shipments. a. Bill of Lading Number The Commission received many comments in favor of including the bill of lading number as required information. Several commenters noted that without the bill of lading number it would be difficult to determine which shipment is being charged and to verify the accuracy of the charge.111 However, the Commission received one comment that opposed such a requirement. OCEMA stated that the bill of lading number is not provided to billed parties that are not party to the transportation contract because disclosure may present a risk of violating legal or contractual non-disclosure requirements.112 In response to this comment, the Commission notes that bill of lading numbers are available through publicly accessible import and export data systems, such as PIERS. In addition, the proposed rule would prohibit the billing party from issuing demurrage or detention invoices to a person other than the person for whose account the billing party provided ocean transportation or space to store goods. Further, commenters observed that demurrage and detention invoices already include bill of lading numbers.113 Because the bill of lading number provides valuable identifying information to the billed party, the Commission proposes requiring this information on demurrage and detention invoices. 110 46 U.S.C. 41104(d)(2)(B) and (C). e.g., Doc. No. 22 at 2. 112 Doc. No. 78 at 4. 113 Doc. No. 52 at 7; Doc. No. 49 at 4. 111 See E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules b. Basis for Why Party Was Invoiced The Commission received numerous comments asserting that billing parties issue invoices to multiple parties for the same charges and this sometimes results in duplicative payments.114 Many commenters supported requiring billing parties to include the basis for why a party has been invoiced and is thus liable for the charge. Requiring billing parties to identify the basis for why billed parties are liable for the charge would enable billed parties to confirm that they are correctly billed the invoiced charges. The proposed rule is consistent with proposed § 541.4 that would prohibit billing parties from issuing demurrage and detention invoices to persons other than the person for whose account the billing party provided ocean transportation or space to store goods. Because the invoice would identify the basis for why the billed party is liable for the charge, they would be able to confirm that the billing party could issue an invoice to them under proposed § 541.4. jspears on DSK121TN23PROD with PROPOSALS 2. Timing Information The invoice must contain sufficient information to enable the billed party to identify the relevant time for which the charges apply and the applicable due date for the invoiced charges, including: the billing date; the billing due date; the allowed free time in days; the start date of free time; the end date of free time; for imports, the container availability date; for exports, the earliest return date; and the specific date(s) for which demurrage or detention were charged. OSRA 2022 requires that invoices include the date the container is made available; for exported shipments, the earliest return date; the allowed free time in days; the start date of free time; and the end date of free time.115 The proposed rule clarifies that the billing parties must only provide container availability date for import shipments. The proposed rule would also require billing parties to specify the dates for which demurrage and/or detention charges accrued, the billing date, and the billing due date. a. Dates Demurrage or Detention Charges Accrued The Commission received numerous comments in response to the ANPRM that indicated that invoices should reflect any ‘‘clock-stopping’’ events that would prevent the return of equipment, such as container unavailability or lack 114 See e.g., Doc. No. 13 at 5–6; Doc. No. 15 at 3; Doc. No. 18 at 2; Doc. No. 19 at 2; Doc. No. 37 at 2; Doc. No. 28 at 2. 115 46 U.S.C. 41104(d)(2)(A), (E)–(G). VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 of return locations or appointment times.116 OCEMA, however, opposed such a requirement and stated that this type of information is not always known at the time of invoicing and would therefore pose a risk of delaying the payment process and disrupt the flow of cargo.117 Further, OCEMA asserted that information such as container and appointment availability are sourced from third party systems and therefore the timing and feasibility of providing this information is unknown.118 WSC noted that carriers do not have visibility to such ‘‘clock-stopping’’ events and that shippers or motor carriers are more aware of challenges to container pick-up and drop-off.119 Maher also commented that it does not provide ‘‘clock-stopping events’’ on their invoices because of the cost and administrative burden to providing such information.120 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 proposed rule incorporates the intent of OSRA 2022 to shift the burden to billing parties to justify the demurrage or detention charges while allowing billing parties to correct invoices when the intervening events are not initially known to them. b. Billing Date and Payment Due Date The proposed rule would require the billing party to include the invoice billing date and payment due date. The proposed requirement to include the billing date and the payment due date will enable the billed party and the Commission to confirm that the billing parties are adhering to the proposed billing practices outlined in proposed § 541.7. If the billed party has the billing date information, they can confirm that the billed party issued the invoice within 30 days from when the charge was last incurred. In addition, providing the payment due date would notify the billed party of when they must pay the invoiced charges. 116 See e.g., Doc. No. 13 at 5; Doc. No. 14 at 2; Doc. No. 15 at 2; Doc. No. 16 at 2; Doc. No. 17 at 2; Doc. No. 18 at 2; Doc. No. 19 at 2; Doc. No. 21 at 3; Doc. No. 29 at 2; Doc. No. 30 at 1; Doc. No. 44 at 2; Doc. No. 83 at 2. 117 Doc. No. 78 at 5. 118 Doc. No. 78 at 5. 119 Doc. No. 61 at 7. 120 Doc. No. 49 at 4. PO 00000 Frm 00038 Fmt 4702 Sfmt 4702 62351 3. Rate Information The invoice must contain sufficient information to enable the billed party to identify the amount due and readily ascertain how that amount was calculated, including: the total amount due; the applicable detention or demurrage rule (i.e., the tariff name and rule number or applicable service contract number and section) on which the daily rate is based; and the specific rate or rates per the applicable tariff rule or service contract. The proposed rule incorporates the rate information requirements contained in OSRA 2022.121 It also clarifies that when billing parties provide the applicable detention or demurrage rule on which the daily rate is based, the billing party should provide sufficient detail so that the billed party is able to locate the specific rate that should apply and confirm that the invoice includes the correct rate. Under the proposed rule, demurrage and detention invoices would include information necessary to ascertain the rate that the billing party applied, grounds for applying that rate, dates for which the billing party charged the rate, and the total amount due. This enhanced transparency will enable billed parties to efficiently confirm the charges and decide whether to dispute the invoiced charges. A commenter expressed concern that providing the applicable detention or demurrage rule on which the daily rate is based could ‘‘undermine service contract confidentiality.’’ 122 However, because the proposed rule would prohibit billing parties from issuing a demurrage or detention invoice to a person other than the person for whose account the billing party provided ocean transportation or space to store goods, the billed party is already privy to the confidential contract or negotiated terms, including the specific agreed upon rate. 4. Dispute Information Under the proposed rule, the invoice must contain sufficient information to enable the billed party to readily identify a contact to whom they may direct questions or concerns related to the invoice and understand the process to request fee mitigation, refund, or waiver. The proposed rule would require the invoice to include: an email, telephone number, or other appropriate contact information for questions or request for fee mitigation, refund, or waiver; an URL address of a publiclyaccessible portion of the billing party’s website that provides a detailed 121 46 U.S.C. 41104(d)(2)(H)–(J). No. 61 at 5. 122 Doc. E:\FR\FM\14OCP1.SGM 14OCP1 62352 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS description of information or documentation that the billed party must provide to successfully request fee mitigation, refund, or waiver; and defined timeframes that comply with the billing practices in this part, during which the billed party must request fee mitigation, refunds, or waivers and within which the billing party will resolve such requests. OSRA 2022 requires that the invoice include contact information for questions or requests for mitigation of fees.123 The proposed rule would also require that the invoice include the URL address where billed parties can obtain a detailed description of the information or documentation that must be provided with a request for fee mitigation, refunds, or waivers. In addition, the proposed rule would require that the invoice provide defined timeframes by which the billed party must request fee mitigation, refunds, or waivers, and the timeframe by which the billing party would resolve such requests. a. Website Address That Describes Information Required for Dispute Resolution The proposed regulation would require the invoice to provide the URL address of a publicly-accessible portion of the billing party’s website that describes the information that the billed party must provide to successfully request fee mitigation, refund, or waiver. Commenters indicated that shippers lack awareness regarding what information they should include when they request fee mitigation, refunds, or waivers.124 Knowing what information or documentation must be filed with requests for fee mitigation, refunds, and waivers, will improve efficiency within the dispute process. Parties will not need to exchange communications that inform billed parties what information to include with their requests, notify billed parties that they did not file all the required information, or supplement pending requests with additional information. In addition, awareness of what information must be provided with any request for fee mitigation, refund, or waiver, will enable billed parties to collect the necessary information and decrease the number of requests denied on technicalities. The Commission acknowledges that a billing party should require the same information to be submitted with requests for fee mitigation, refund, or waiver, regardless of which billed party 123 46 U.S.C. 41104(d)(2)(K). e.g., Doc. No. 8 at 3; Doc. No. 13 at 7; Doc. No. 41 at 4; Doc. No. 43 at 5; Doc. No. 53 at 5; Doc. No. 65 at 5; Doc. No. 61 at 10; Doc. No. 63 at 4; Doc. No. 64 at 7; Doc. No. 67 at 6. 124 See VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 is making the request. Thus, it is not necessary to include a detailed description of information or documents that the billed party must provide to successfully request a fee mitigation, refund, or waiver on each individual demurrage or detention invoice. However, it is important that billed parties can easily locate this information. To ensure that billed parties are able to find this vital information, the proposed rule would require the invoice to include the URL address for a publicly-accessible portion of the billing party’s website that describes the required information. The Commission encourages billing parties to provide a URL address that is specific (i.e., providing the billing party’s homepage when there is no clear indication where this information can be found would be insufficient). b. Defined Timeframes The proposed rule would also require the invoice to include specific timeframes within which the billed party must submit a fee mitigation, refund, or waiver request and for when the billing party will resolve such requests. This proposed rule would require the timeframes to comply with the proposed billing practices in §§ 541.7 and 541.8. As a result, demurrage or detention invoices would notify the billed party of these key timeframes and required billing practices and the billed party would not need to be familiar with the Commission’s regulations to know these key dates. 5. Certifications Under the proposed rule, the invoice must contain a statement from the billing party that the demurrage or detention charge is consistent with any of the Commission’s rules related to demurrage and detention, including the proposed rule and 46 CFR 545.5.125 In addition, the proposed rule would require the invoice to include a statement from the billing party that their performance did not cause or contribute to the underlying invoiced charges. OSRA 2022 requires billing parties to include both statements on demurrage and detention invoices.126 The proposed rule would incorporate these required statements. In addition, the proposed rule clarifies that the Commission’s rules related to demurrage and detention include the proposed rule and the interpretive rule on demurrage and detention at 46 CFR 545.5. Although the ANPRM did not 125 46 126 46 PO 00000 U.S.C. 41104(d)(2)(L). U.S.C. 41104(d)(2)(M). Frm 00039 Fmt 4702 Sfmt 4702 request comments on whether billing parties include such statements on demurrage and detention invoices, several commenters supported requiring such statements or similar statements.127 C. Billing Practices 1. 30-Day Timeframe To Issue Demurrage or Detention Invoices In the ANPRM, the Commission noted concerns from stakeholders regarding the lack of clearly defined timeframes for the issuance of demurrage or detention invoices.128 In Docket No. 19– 05, several commenters asserted that billing parties should issue demurrage or detention invoices within specific timeframes.129 When issuing the Interpretive Rule in May 2020, the Commission determined not to take action regarding deadlines for demurrage or detention invoices but stated that it reserved the right to address the issue at a later date.130 In the ANPRM, the Commission stated that it continued to receive reports of delays in receiving demurrage or detention invoices and the difficulties in validating the accuracy of the charges contained in invoices received months after the occurrence of the charges.131 The Commission requested comments on whether it should require billing parties issue demurrage or detention invoices within 60 days of the occurrence of the charge, noting that this approach would align with the UIIA.132 Specifically, the Commission stated that it was interested in whether the UIIA timeframe is effective and whether a longer or shorter deadline would be appropriate.133 Many commenters responded to the question of whether the Commission should require that billing parties issue demurrage or detention invoices within 60 days of when the charge stops accruing. Four commenters opposed requiring billing parties issue a demurrage or detention invoice within a specified timeframe.134 Two commenters, WSC and OCEMA, asserted that the Commission should 127 See e.g., Doc. No. 75 at 3; Doc. No. 43 at 5; Doc. No. 77 at 5; Doc. No. 69 at 5; Doc. No. 84 at 4. 128 87 FR at 8508. 129 85 FR at 29662. 130 85 FR at 29662. 131 87 FR at 8508. 132 87 FR at 8508. 133 87 FR at 8508. 134 Doc. No. 61 at 9–10; Doc. No. 26 at 7; Doc. No. 68 at 1 (incorporates NAWE Comments); Doc. No. 78 at 6–7. WSC and OCEMA are associations that represent ocean common carriers. See Doc. No. 78 at 1. NAWE and PONYNJSSA are associations that represent marine terminal operators. Doc. No. 26 at 1; Doc. No. 68 at 1. E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules not regulate when billing parties issue demurrage or detention invoices because these timeframes should be set by contractual terms or commercial negotiations.135 If, however, the Commission decides to require billing parties to issue demurrage or detention invoices within a specific timeframe, WSC and OCEMA stated the timeframe should be no shorter than 60 days.136 In addition, both WSC and OCEMA noted that any such timeframe for issuing demurrage or detention invoices should allow for nuanced application of the deadline.137 For example, both parties raised questions regarding how the deadline would apply to third-parties that pass through demurrage and detention charges.138 NAWE asserted that it is unnecessary for the Commission to regulate timeframes for billing parties, especially MTOs, to issue demurrage or detention invoices.139 Specifically, NAWE observed that most MTOs use electronic data interchanges and electronic payment methods and are able to ‘‘invoice’’ demurrage or detention charges immediately after these charges stop accruing.140 Because there are no delays for such MTOs in issuing demurrage or detention invoices, NAWE commented that there is no need for such regulations with regard to MTOs.141 The remaining commenters supported mandating a deadline within which a billing party must issue a demurrage or detention invoice. These include comments submitted by a customs broker; 10 motor carriers and motor carrier organizations; 142 14 OTI and OTI organizations; 143 31 BCOs and BCO trade organizations; 144 and five with unknown affiliations.145 These commenters cited several reasons in support of an invoice 135 Doc. No. 61 at 9–10; Doc. No. 78 at 6–7. No. 61 at 10; Doc. No. 78 at 7. 137 Doc. No. 61 at 10; Doc. No. 78 at 7. 138 Doc. No. 61 at 10; Doc. No. 78 at 7. 139 Doc. No. 26 at 7. 140 Doc. No. 26 at 7. 141 Doc. No. 26 at 7. 142 See Doc. No. 51; Doc. No. 56; Doc. No. 46; Doc. No. 56; Doc. No. 7; Doc. No. 15; Doc. No. 24; Doc. No. 33; Doc. No. 47; Doc. No. 17. 143 See Doc. No. 13; Doc. No. 75; Doc. No. 70; Doc. No. 82; Doc. No. 69; Doc. No. 83; Doc. No. 60; Doc. No. 62; Doc. No. 19; Doc. No. 77; Doc. No. 48; Doc. No. 76; Doc. No. 63, Doc. No. 81. 144 See Doc. No. 79; Doc. No. 3; Doc. No. 67; Doc. No. 6; Doc. No. 14; Doc. No. 8; Doc. No. 30; Doc. No. 38; Doc. No. 34; Doc. No. 22; Doc. No. 40; Doc. No. 42; Doc. No. 66; Doc. No. 37; Doc. No. 72; Doc. No. 71; Doc. No. 44; Doc. No. 21; Doc. No. 28; Doc. No. 41; Doc. No. 43; Doc. No. 64; Doc. No. 33; Doc. No. 53; Doc. No. 54; Doc. No. 65; Doc. No. 55; Doc. No. 58; Doc. No. 73; Doc. No. 35; Doc. No. 84. 145 See Doc. No. 9; Doc. No. 18; Doc. No. 27; Doc.; Doc. No. 32. jspears on DSK121TN23PROD with PROPOSALS 136 Doc. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 deadline. For example, several commenters asserted that having a deadline will provide billed parties with predictability and transparency regarding when they will receive their invoices.146 In the ANPRM, the Commission requested information on how long it typically takes to receive a demurrage or detention invoice.147 Responses to this question vary greatly. For example, some commenters stated that billed parties receive demurrage or detention invoices within several days after the charges stop accruing.148 Other commenters claimed that it may take between 2–4 weeks to receive demurrage or detention invoices.149 Most commenters however, stated that the time varies greatly and could range from 30 days to 24 months.150 For example, the Meadows Group reported that it received demurrage and detention invoices an average of 120 days after the charge accrued, but that it also received invoices 24 months after the fact.151 In addition, National Association of Manufacturers (NAM) stated that its members report a wide range of invoice delivery times, from as short as 30 days to as long as nearly 24 months.152 In addition, commenters noted that the time it takes for a billing party to issue a demurrage or detention invoice varies on the charges assessed. For example, one commenter stated that billing parties invoice import demurrage before releasing containers, but that billing parties may take as long as 30 days to invoice export demurrage charges and 60 days to invoice import and export detention charges.153 In addition to providing transparency and predictability for when billing parties must issue demurrage or detention invoices, commenters noted 146 Doc. No. 67 at 5; Doc. No. 24 at 4; Doc. No. 83 at 3; Doc. No. 62 at 5; Doc. No. 8 at 2–3. 147 87 FR at 8509. 148 Doc. No. 19 at 3; Doc. No. 37 at 3; Doc. No. 26 at 4; Doc. No. 49 at 5. 149 Doc. No. 18 at 3; Doc. No. 25 at 2; Doc. No. 32 at 3; Doc. No. 44 at 4; Doc No. 14 at 3. 150 Doc. No. 17 at 3 (3–6 months); Doc. No. 22 at 3 (120-day average, but have received invoices 24 months after); Doc. No. 33 at 9 (average is 30–60 days, but sometimes up to six months); Doc. No. 28 at 3 (average of 30–60 days but sometimes up to six months); Doc. No. 48 at 6 (members received invoices 180 days after a transaction took place); Doc. No. 54 at 4 (takes up to 6 months to receive an invoice); Doc. No. 55 at 2 (up to 24 months); Doc. No. 53 at 5 (averages 60–90 days, but as long as 8 months); Doc. No. 67 at 2, 5 (typically receive billings within 30 days, but sometimes 60 days or more); Doc. No. 3 at 3 (averaging 6–12 months). See Doc. No. 27 at 3; Doc. No. 46 at 2; Doc. No. 41 at 4. 151 Doc. No. 22 at 3 152 Doc. No. 55 at 2. 153 Doc. No. 9 at 3; see Doc. No. 39 at 2; Doc. No. 56 at 2; Doc. No. 67 at 3; Doc. No. 60 at 8; Doc. No. 65 at 5; Doc. No. 64 at 6. PO 00000 Frm 00040 Fmt 4702 Sfmt 4702 62353 that an invoicing deadline will ensure that billed parties will have the information readily available to verify the accuracy of the charges.154 Similarly, many commenters claimed that timely billing will reduce costly and time-consuming research to verify charges, particularly when received months after the fact.155 NAM explains that shippers and BCOs regularly receive costly bills months after the fact and that responding to such bills require diverting staff hours and attention away from cargo delivery and efficient logistics operations.156 Furthermore, NAM asserted that instituting an invoice deadline will ‘‘ensure that shippers and BCOs will be able to accurately maintain shipping information and records to validate any demurrage or detention bills[.]’’ 157 Most commenters agreed that billing parties should issue demurrage or detention invoices within a specific timeframe but disagreed on what that timeframe should be. Three commenters did not indicate a specific deadline in their comments but stressed the need for a timeliness standard.158 Among the remaining commenters, 23 commenters supported a 60-day timeframe; 159 25 commenters supported a 30-day timeframe; 160 and 11 commenters favored shorter timeframes ranging from five to twenty-one days.161 154 Doc. No. 67 at 5; Doc. No. 58 at 3; Doc. No. 22 at 3; Doc. No. 84 at 4–5; Doc. No. 28 at 3. 155 Doc. No. 13 at 7; Doc. No. 3 at 2; Doc. No. 54 at 5; Doc. No. 58 at 3; Doc. No. 55 at 2; Doc. No. 53 at 5; Doc. No. 65 at 4; Doc. No. 79 at 4. 156 Doc. No. 55 at 2. 157 Doc. No. 55 at 2. 158 Doc. No. 51 at 2; Doc. No. 34 at 2; Doc. No. 35 at 2. 159 Doc. No. 76 at 7; Doc. No. 65 at 5; Doc. No. 54 at 4; Doc. No. 39 at 2; Doc. No. 46 at 2; Doc. No. 32 at 2; Doc. No. 33 at 9; Doc. No. 9 at 3; Doc. No. 24 at 4; Doc. No. 81 at 4; Doc. No. 44 at 4; Doc. No. 58 at 3; Doc. No. 55 at 2; Doc. No. 43 at 5; Doc. No. 56 at 2; Doc. No. 53 at 5; Doc. No. 22 at 3; Doc. No. 37 at 3; Doc. No. 48 at 6; Doc. No. 28 at 3; Doc. No. 63 at 4; Doc. No. 8 at 3; Doc. No. 17 at 4. 160 Doc. No. 3 at 2–3; Doc. No. 6 at 2; Doc. No. 7 at 4; Doc. No. 13 at 7; Doc. No. 14 at 4; Doc. No. 15 at 3; Doc. No. 29 at 3; Doc. No. 30 at 2; Doc. No. 40 at 3; Doc. No. 42 at 1 (citing Doc. No. 29); Doc. No. 47 at 3; Doc. No. 67 at 3; Doc. No. 66 at 1 (citing Doc. No. 29); Doc. No. 83 at 5; Doc. No. 60 at 8; Doc. No. 62 at 5; Doc. No. 64 at 6; Doc. No. 67 at 4–5; Doc. No. 72 at 7; Doc. No. 71 at 1 (citing Doc. No. 29); Doc. No. 75 at 3, 4; Doc. No. 70 at 5; Doc. No. 84 at 5; Doc. No. 82 at 2. Many of these commenters supported shorter timeframes as well. See Doc. No. 70 (supported 7 days); Doc. No. 60 at 8 (supported 5–15 days); Doc. No. 72 at 7 (supported 5–15 days); Doc. No. 64 at 6 (supported 14 days); Doc. No. 75 at 4 (supported 15 days); Doc. No. 82 at 2 (supported 21 days). 161 Doc. No. 27 at 3 (5–10 days); Doc. No. 38 at 4 (10 days); Doc. No. 73 at 3–4 (10 days); Doc. No. 41 at 4 (10 days); Doc. No. 18 at 3 (10 days); Doc. No. 79 at 4 (10–14 days); Doc. No. 56 at 2–3 (14 days); Doc. No. 69 at 5, 7 (14 days); Doc. No. 77 E:\FR\FM\14OCP1.SGM Continued 14OCP1 62354 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS Two commenters who supported the 60-day timeframe stated that this timeframe is reasonable and aligns with the UIIA timeframe.162 For example, Intermodal Association of North America (IANA) asserted that the 60-day timeframe provided in the UIIA represents an industry standard because this requirement has been in effect for over 25 years.163 Additionally, IANA opined that adopting the 60-day timeframe ‘‘will reinforce, rather than disrupt, long-standing industry practices.’’ 164 However, many commenters who supported the 60-day timeframe also urged the Commission to consider shorter timeframes.165 Many commenters also supported an invoice deadline shorter than 60 days for a variety of reasons. For example, commenters asserted that 60 days is too long and that, with billing parties using automated systems, 30 days is more than adequate time for billing parties to issue demurrage or detention invoices.166 Moreover, commenters observed that several billing parties currently issue invoices within 30 days after the charges stop accruing.167 In addition, OTI commenters stated that receiving demurrage and detention invoices from VOCCs and MTOs in a timely manner will allow OTIs to bill their clients within a reasonable timeframe which will hopefully facilitate collection of these charges.168 The Commission is proposing to require billing parties to issue demurrage or detention invoices to billed parties within 30 days from the date charges stop accruing. Although the proposed 30-day timeframe is shorter than the 60-day timeframe contained in the UIIA, commenters reported that demurrage or detention invoices generally arrive within the 30day timeframe.169 For example, MTOs at 7 (14–21 days); Doc. No. 21 at 3–4 (15 days); Doc. No. 19 at 3 (21 days). 162 Doc. No. 43 at 5; Doc. No. 24 at 3. 163 Doc. No. 24 at 3. 164 Doc. No. 24 at 4. 165 Doc. No. 65 at 5; Doc. No. 54 at 4; Doc. No. 81 at 4; Doc. No. 28 at 3. 166 Doc. No. 29 at 2; Doc. No. 30 at 2; Doc. No. 38 at 4; Doc. No. 67 at 3; Doc. No. 73 at 4; Doc. No. 40 at 3; Doc. No. 56 at 3. See Doc. No. 60 at 8. 167 See Doc. No. 29 at 2–3 (immediate billing is an industry standard for the perishable produce industry). See also Doc. No. 67 at 5; Doc. No. 30 at 2; Doc. No. 40 at 3; Doc. No. 38 at 4. Commenters report that they receive demurrage or detention invoices several days to one month after charges stop accruing. Doc. No. 19 at 3; Doc. No. 37 at 3; Doc. No. 26 at 4; Doc. No. 49 at 5; Doc. No. 18 at 3; Doc. No. 25 at 2; Doc. No. 32 at 3; Doc. No. 44 at 4; Doc. No. 14 at 3. 168 Doc. No. 32 at 3; Doc. No. 69 at 5; Doc. No. 70 at 3, 5; Doc. No. 76 at 7; Doc. No. 77 at 5. 169 Doc. No. 29 at 2–3; Doc. No. 67 at 5; Doc. No. 30 at 2; Doc. No. 40 at 3; Doc. No. 38 at 4; Doc. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 indicated that, because of customer portals and electronic payment systems, invoices are available immediately when the charges stop accruing.170 Because it appears that billing parties are capable of issuing demurrage or detention invoices, on average, within 30 days, applying this timeframe does not appear to be unreasonable. In addition, a 30-day deadline, which provides billing parties sufficient time to prepare an invoice, will also permit billed parties to verify the charges more efficiently. As commenters noted, the more time that passes between when the charges stop accruing and when the billed party receives an invoice, it is more difficult for the billed party to verify the charge because it is less likely that they have the necessary information or documentation to confirm a charge. The Commission also proposes to excuse billed parties from paying assessed charges contained in invoices issued after the 30-day timeframe. If a billing party does not issue a demurrage or detention invoice within the required timeframe, then the charge would be void and the billed party would not be required to pay. Without such a provision, there would be no consequence for not meeting the 30-day timeframe. In addition, this proposed rule is consistent with the UIIA and supported by commenters.171 The 30-day timeframe would apply to VOCCs, MTOs, and NVOCCs. In the ANPRM, the Commission requested comments on whether the Commission should require different timeframes for VOCC and NVOCC demurrage and detention invoices.172 Most commenters responded that the same timelines should apply to VOCCs and NVOCCs.173 However, when NVOCCs pass through demurrage or detention charges assessed against them to their customers, it may be difficult for NVOCCs to issue a demurrage or detention invoice within the required timeframe if it does not receive the initial invoice in a timely manner.174 In addition, OCEMA suggested that the invoice deadlines should ‘‘allow nuance in the application of the deadline for factors that may No. 19 at 3; Doc. No. 37 at 3; Doc. No. 26 at 4; Doc. No. 49 at 5; Doc. No. 18 at 3; Doc. No. 25 at 2; Doc. No. 32 at 3; Doc. No. 44 at 4; Doc. No. 14 at 3. 170 Doc. No. 26 at 7; Doc. No. 49 at 4. 171 UIIA at E.6.c; Doc. No. 84 at 5; Doc. No. 77 at 7; Doc. No. 69 at 5, 7; Doc. 75 at 4; Doc. No. 43 at 5. 172 87 FR at 8509. 173 Doc. No. 3 at 2; Doc. No. 41 at 3; Doc. No. 64 at 5; Doc. No. 28 at 2; Doc. No. 43 at 4; Doc. No. 53 at 4; Doc. No. 51 at 2; Doc. No. 80 at 1; Doc. No. 61 at 8; Doc. No. 15 at 2; Doc. No. 22 at 3; Doc. No. 46 at 2. 174 See Doc. No. 32 at 3; Doc. No. 69 at 5; Doc. No. 70 at 3, 5; Doc. No. 76 at 7; Doc. No. 77 at 5. PO 00000 Frm 00041 Fmt 4702 Sfmt 4702 justify delay[.]’’ 175 The Commission requests comments discussing how it can best reflect the application of the deadline to NVOCCs that pass through demurrage or detention charges. 2. Timeframes for Disputing Charges and Resolving Disputes The Commission proposes that billed parties submit any requests for fee mitigation, refund, or waiver to billing parties within 30 days of receiving a demurrage or detention invoice.176 The proposed rule would provide billed parties 30 days to verify the invoiced charges; decide whether they would like to request fee mitigation, refund, or waiver; and collect the documentation to support its request. The proposed timeframe protects billed parties against unreasonable deadlines that billing parties may impose upon their customers. At the same time, the 30-day dispute timeframe would notify billed parties that, if they plan to request fee mitigation, refund, or waiver, they have a limited amount of time within which they must submit such a request and it would protect billing parties from untimely requests. The 30-day timeframe for disputing charges is consistent with the timeframe for billed parties to dispute charges in the UIIA and is supported by commenters.177 One commenter suggested extending the current dispute deadline from 30 to 60 days to allow carriers more time to audit and pay per diem invoices accordingly.178 The Commission is proposing this timeframe in conjunction with its proposed 30-day timeframe for billing parties to issue demurrage or detention invoices. Because the proposed rules would require billing parties to issue invoices in a timelier manner, one anticipated benefit is that billed parties would be able to more quickly verify the charges as the documents necessary to confirm the charges would be more readily available. Accordingly, in the Commission’s view, the 30-day timeframe is a reasonable one that permits billed parties to review the charges and request fee mitigation, refund, or waiver as necessary that they can meet readily. 175 Doc. No. 78 at 7. See Doc. No. 13 at 4; Doc. No. 61 at 10. 176 The proposed 30-day deadline would apply to requests for fee mitigation, refunds, or waivers submitted by the billed party to the billing party through the billing parties’ dispute process. The proposed rule does not apply to ‘‘charge complaints’’ authorized by section 10 of OSRA 2022 (codified in 46 U.S.C. 41310). 177 UIIA at E.6.f; Doc. No. 84 at 4; Doc. No. 64 at 7; Doc. No. 43 at 5. 178 Doc. No. 59 at 2. E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules jspears on DSK121TN23PROD with PROPOSALS The Commission proposes that, after receiving a fee mitigation, refund, or waiver request, a billing party must resolve the request within 30 days. This proposed deadline is consistent with the response deadline contained in the UIIA and supported by several commenters.179 The proposed rule would require a billing party, after receiving a request to mitigate, refund, or waive a charge on a demurrage or detention invoice, to determine whether to grant or deny the request within 30 days of receiving the request. Resolution of a request also includes billing parties to mitigate, refund, or waive a charge, if appropriate, within the 30-day timeframe. If the billing party does not resolve the fee mitigation, refund, or waiver request within 30 days, then the charge at issue must be mitigated, refunded, or waived. The proposed deadline would provide billed parties with certainty that it will receive a response to its fee mitigation, refund, or waiver request within a specific timeframe. Like receiving demurrage or detention invoices, commenters reported that the time it takes for billed parties to receive a refund varies greatly. For example, one commenter claimed that ‘‘[r]efunds are paid when the carrier or terminal operator wants to do it’’ and that it can take up to six months to receive a refund.180 Commenters generally supported having a deadline for resolving requests for fee mitigation, refund, or waiver. As one commenter succinctly stated, ‘‘just as bills must be paid within a certain amount of time, it seems only fair that refunds should be issued within a set time frame.’’ 181 In that vein, proposing to require billing parties to resolve requests for fee mitigation, refunds, or waivers within 30 days of receipt ensures that such requests are not pending for an indefinite period of time. 179 UIIA at H.1; Doc. No. 63 at 4; Doc. No. 43 at 5; Doc. No. 64 at 7; Doc. No. 41 at 4; Doc. No. 54 at 5; Doc. No. 33 at 11; Doc. No. 74 at 5. See Doc. No. 25, Attachment at 1 (states that the company aspires to address disputes within 30 days). Several commenters supported shorter timeframes; however, it appears that these commenters were discussing timeframes for when billing parties should issue refunds after they dismiss the charges at issue. See Doc. No. 39 at 3; Doc. No. 69 at 8; Doc. No. 46 at 3; Doc. No. 84 at 5; Doc. No. 75 at 5; Doc. No. 79 at 4; Doc. No. 3 at 3; Doc. No. 72 at 8; Doc. No. 60 at 9; Doc. No. 28 at 3; Doc. No. 21 at 4. 180 Doc. No. 77 at 8. See Doc. No. 33 at 11; see also Doc. No. 22 at 4 (typically takes six months to receive a refund, may take as long as two years). 181 Doc. No. 51 at 4. See Doc. No. 44 at 4 (‘‘[r]efunds should be issued in a timely manner, certainly within a specified number of days’’). VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 V. Public Participation How do I prepare and submit comments? You may submit comments by using the Federal eRulemaking Portal at www.regulations.gov, under Docket No. 2022–0066, Demurrage and Detention Billing Requirements. Please follow the instructions provided on the Federal eRulemaking Portal to submit comments. How do I submit confidential business information? The Commission will provide confidential treatment for identified confidential information to the extent allowed by law. If you would like to request confidential treatment, pursuant to 46 CFR 502.5, you must submit the following, by email, to secretary@ fmc.gov: • A transmittal letter that identifies the specific information in the comments for which protection is sought and demonstrates that the information is a trade secret or other confidential research, development, or commercial information. • A confidential copy of your comments, consisting of the complete filing with a cover page marked ‘‘Confidential-Restricted,’’ and the confidential material clearly marked on each page. • A public version of your comments with the confidential information excluded. The public version must state ‘‘Public Version—confidential materials excluded’’ on the cover page and on each affected page and must clearly indicate any information withheld. Will the Commission consider late comments? The Commission will consider all comments received before the close of business on the comment closing date indicated above under DATES. To the extent possible, we will also consider comments received after that date. How can I read comments submitted by other people? You may read the comments received by the Commission at www.regulations.gov, under Docket No. 2022–0066, Demurrage and Detention Billing Requirements. VI. Rulemaking Analyses Regulatory Flexibility Act The Regulatory Flexibility Act, 5 U.S.C. 601–612, provides that whenever an agency is required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 553, the agency must prepare and make available for public comment an PO 00000 Frm 00042 Fmt 4702 Sfmt 4702 62355 initial regulatory flexibility analysis (IRFA) describing the impact of the proposed rule on small entities, unless the head of the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603, 605. The proposed rule would require VOCCs, NVOCCs, and MTOs to including minimum billing information on detention and demurrage invoices. The rulemaking additionally requires billing parties that issue demurrage and detention invoices to follow certain billing practices; specifically, billed parties must issue demurrage and detention invoices within 30 days from when charges stop accruing. The Commission presumes that VOCCs and MTOs generally do not qualify as small entities under the guidelines of the Small Business Administration (SBA).182 The Commission previously stated that VOCCs and MTOs generally are large companies that exceed the employee (500) and/or annual revenue ($21.5 million) thresholds to be considered small business entities. However, the Commission presumes that NVOCCs are small business entities. There are likely two types of costs imposed by the proposed rulemaking on the affected businesses. The imposition of a 30-day deadline to issue an invoice from when demurrage and detention charges stop accruing could result in a loss of revenue to the billing party. In additional, the minimum billing information requirements imposed by the proposed rule may require the billing party to collect additional information and change its billing information technology system to include all the required information on invoices. Most of the costs of the rulemaking will be borne by VOCCs and MTOs as they generally assess demurrage and detention charges, and not NVOCCs. As discussed above, in most cases, NVOCCs pass through detention and demurrage charges billed to them on invoices generated by VOCCs or MTOs. Accordingly, NVOCCs should receive the minimum billing information required by the proposed rule from either the VOCC or MTO issuing the invoice. For these reasons, the Chairman of the Federal Maritime Commission certifies that if this rule is promulgated, it would not have a significant 182 FMC Policy and Procedures regarding Proper Consideration of Small Entities in Rulemakings (Feb. 7, 2003), available at: https://www.fmc.gov/ wp-content/uploads/2018/10/SBREFA_Guidelines_ 2003.pdf. E:\FR\FM\14OCP1.SGM 14OCP1 62356 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules economic impact on a substantial number of small entities. jspears on DSK121TN23PROD with PROPOSALS National Environmental Policy Act The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321– 4347) requires Federal agencies to consider the environmental impacts of proposed major Federal actions significantly affecting the quality of the human environment, as well as the impacts of alternatives to the proposed action. When a Federal agency prepares an environmental assessment, the Council on Environmental Quality (CEQ) NEPA implementing regulations (40 CFR parts 1500 through 1508) require the Federal agency to ‘‘include brief discussions of the need for the proposal, of alternatives [. . .], of the environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted.’’ 40 CFR 1508.9(b). This section serves as the Commission’s Draft Environmental Assessment (Draft EA) for the proposed changes to 46 CFR part 541. Upon completion of an environmental assessment, it was determined that the proposed rule will not constitute a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq., and that preparation of an environmental impact statement is not required. This Finding of No Significant Impact (‘‘FONSI’’) will become final within 10 days of publication of this notice in the Federal Register unless a petition for review is filed by any of the methods described in the ADDRESSES section of the document. The FONSI and environmental assessment are available for inspection on the docket at https:// www.regulations.gov. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521) (PRA) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. The agency must submit collections of information in proposed rules to OMB in conjunction with the publication of the notice of proposed rulemaking. In compliance with the PRA, the Commission has submitted the proposed information collection to the Office of Management and Budget and is requesting comment on the proposed revision. With the proposed addition of 46 CFR part 541, the Commission has identified specific billing information required on demurrage and detention invoices. VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 Although some entities issue demurrage and detention invoices that contain most of the required information, many entities will likely need to revise their practices to include the required information. The Commission believes that the addition of 46 CFR part 541 will likely increase the overall industry burden, but that it will not have a significant impact on members of the shipping public. Title: 46 CFR Part 541—Demurrage and Detention Billing Requirements OMB Control Number: 3072–XXXX. Abstract: 46 U.S.C. 41104(a)(15) and (d)(2) and 46 CFR part 541 subpart A, if adopted, require demurrage and detention invoices to contain certain additional information to increase transparency so that billed parties can identify the containers at issue, the applicable rate, dates for which charges accrued, and how to dispute charges. Further, 46 U.S.C. 41104(d)(2) and 46 CFR part 541, if adopted, also require demurrage and detention invoices to certify that the charges comply with applicable regulatory provisions and that the invoicing party’s behavior did not contribute to the charges. Current Action: The proposed rule implements statutory text that identifies the minimum information that billing parties must include on demurrage and detention invoices, identifies additional information that billing parties must include on demurrage and detention invoices, and clarifies which entities may receive demurrage and detention invoices. Type of Request: Approve information collection. Needs and Uses: The Commission identifies information that entities must include on demurrage and detention invoices to ensure compliance with the Shipping Act of 1984, as amended. Specifically, proposed 46 CFR part 541 subpart A implements the billing information requirements contained in 46 U.S.C. 41104(d)(2) and adds additional minimum information that billing parties must include on demurrage and detention invoices. Frequency: The frequency of demurrage and detention invoices is determined by the billing party. It is the billing entity’s responsibility to ensure that their demurrage and detention charges comply with applicable statutory and regulatory provisions. The Commission estimates that between five and ten percent of all containers moving in U.S.-foreign trade will receive a demurrage and/or detention invoice or an estimated range of 1,135,000 and 2,270,000 invoices annually. PO 00000 Frm 00043 Fmt 4702 Sfmt 4702 Type of Respondents: VOCCs, MTOs, and NVOCCs are required to include specific information on their demurrage and detention invoices sent to billed parties. Number of Annual Respondents: The Commission anticipates an annual respondent universe of 354 VOCCs and MTOs. The Commission did not include NVOCCs in its annual respondent universe because in most, if not all cases, NVOCCs pass through the demurrage and detention charges it receives to their customers. Because NVOCCs are passing through the charges they are not collecting the required minimum information themselves. Estimated Time per Response: The Commission estimates a one-time burden of an estimated 25 hours per respondent to integrate the required billing information elements into their existing invoicing system. After this initial burden, the Commission anticipates that the estimated time to create and retain each demurrage or detention invoice to be six minutes or 0.1 hours. Total Annual Burden: The Commission estimates a one-time burden for respondents to integrate the additional billing information elements, required by OSRA 2022 and by the proposed rule, into their existing invoicing system to be 8,850 personhours and $882,522. After this initial integration, the Commission estimates the total annual burden to provide demurrage and detention invoices and to ensure accuracy to be 113,500– 227,000 person-hours and $6,339,020– $12,678,040. Comments are invited on: • Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; • Whether the Commission’s estimate for the burden of the information collection is accurate; • Ways to enhance the quality, utility, and clarity of the information to be collected; • Ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. Please submit any comments, identified by the docket number in the heading of this document, by the methods described in the ADDRESSES section of this document. E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules Executive Order 12988 (Civil Justice Reform) be adhered to when invoicing for demurrage or detention. eliminates any obligation of the billed party to pay the applicable invoice. This proposed rule meets the applicable standards in E.O. 12988 titled, ‘‘Civil Justice Reform,’’ to minimize litigation, eliminate ambiguity, and reduce burden. § 541.2 § 541.6 Regulation Identifier Number The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at https:// www.reginfo.gov/public/do/ eAgendaMain. List of Subjects in 46 CFR Part 541 Demurrage and detention; Common carriers; Exports; Imports; Marine terminal operators. For the reasons set forth in the preamble, the Federal Maritime Commission proposes to add 46 CFR part 541 as follows: ■ PART 541—DEMURRAGE AND DETENTION Subpart A—Demurrage and Detention Billing Requirements Sec. 541.1 Purpose 541.2 Scope and applicability 541.3 Definitions 541.4 Properly issued invoices 541.5 Failure to include required information 541.6 Contents of invoice 541.7 Issuance of demurrage and detention invoices 541.8 Requests for fee mitigation, refund, or waiver 541.9–541.98 [Reserved] 541.99 OMB control number assigned pursuant to the Paperwork Reduction Act Subpart B [Reserved] Authority: 5 U.S.C. 553; 46 U.S.C. 40307, 40501–40503, 41101–41106, 40901–40904, and 46105; and 46 CFR 515.23. jspears on DSK121TN23PROD with PROPOSALS 62357 Subpart A—Billing Requirements and Practices § 541.1 Purpose This part establishes the minimum information that must be included on or with demurrage and detention invoices. It also establishes procedures that must VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 Scope and applicability (a) This part sets forth regulations governing any invoice issued by an ocean common carrier, marine terminal operator, or non-vessel operating common carrier to a billed party or their designated agent for the collection of demurrage or detention charges. (b) This regulation does not govern the billing relationships among and between ocean common carriers and marine terminal operators. § 541.3 Definitions In addition to the definitions set forth in 46 U.S.C. 40102, when used in this part: Billing dispute means any disagreement with respect to the validity of the charges, or the method of invoicing raised by the billed party or its agent to the billing party. Billed party means the person receiving the demurrage or detention invoice and who is responsible for the payment of any incurred demurrage or detention charge. Billing party means the ocean common carrier, marine terminal operator, or non-vessel operating common carrier who issues a demurrage or detention invoice. Demurrage or detention mean any charges, including ‘‘per diem’’ charges, assessed by ocean common carriers, marine terminal operators, or non-vessel operating common carriers related to the use of marine terminal space (e.g., land) or shipping containers, but not including freight charges. Demurrage or detention invoice means any statement of charges printed, written, or accessible online that documents an assessment of demurrage or detention charges. § 541.4 Properly issued invoices A properly issued invoice is a demurrage or detention invoice issued by a billing party to the person for whose account the billing party provided ocean transportation or storage. (a) This person must have contracted with the billing party for the carriage or storage of goods and is therefore responsible for the payment of any incurred demurrage or detention charge. (b) A billing party cannot issue an invoice to any other person. § 541.5 Failure to include required information Failure to include any of the required minimum information in this part in a demurrage or detention invoice PO 00000 Frm 00044 Fmt 4702 Sfmt 4702 Contents of invoice. At a minimum, an invoice for demurrage or detention charges must include the following information: (a) Identifying information. The invoice must contain sufficient information to enable the billed party to identify the container(s) to which the charges apply, including: (1) The Bill of Lading number(s); (2) The container number(s); (3) For imports, the port(s) of discharge; and (4) The basis for why the invoiced party is the proper party of interest and thus liable for the charge. (b) Timing information. The invoice must contain sufficient information to enable the billed party to identify the relevant time for which the charges apply, and the applicable due date for invoiced charges, including: (1) The billing date; (2) The billing due date; (3) The allowed free time in days; (4) The start date of free time; (5) The end date of free time; (6) For imports, the container availability date; (7) For exports, the earliest return date; and (8) The specific date(s) for which demurrage and/or detention were charged. (c) Rate information. The invoice must contain sufficient information to enable the billed party to identify the amount due and readily ascertain how that amount was calculated, including: (1) The total amount due; (2) The applicable detention or demurrage rule (i.e., the tariff name and rule number, applicable service contract number and section, or applicable negotiated arrangement) on which the daily rate is based; and (3) The specific rate or rates per the applicable tariff rule or service contract. (d) Dispute information. The invoice must contain sufficient information to enable the billed party to readily identify a contact to whom they may direct questions or concerns related to the invoice and understand the process to request fee mitigation, refund, or waiver, including: (1) The email, telephone number, or other appropriate contact information for questions or request for fee mitigation, refund, or waiver; (2) The URL address of a publiclyaccessible portion of the billing party’s website that provides a detailed description of information or documentation that the billed party must provide to successfully request fee mitigation, refund, or waiver; and E:\FR\FM\14OCP1.SGM 14OCP1 62358 Federal Register / Vol. 87, No. 198 / Friday, October 14, 2022 / Proposed Rules (3) Defined timeframes that comply with the billing practices in this part, during which the billed party must request a fee mitigation, refund, or waiver and within which the billing party will resolve such requests. (e) Certifications. The invoice must contain statements from the billing party that: (1) The charges are consistent with any of the Federal Maritime Commission’s rules related to demurrage and detention, including, but not limited to, this part and 46 CFR 545.5; and (2) The billing party’s performance did not cause or contribute to the underlying invoiced charges. § 541.7 Issuance of demurrage and detention invoices. jspears on DSK121TN23PROD with PROPOSALS (a) A billing party must issue a demurrage or detention invoice within thirty (30) days from the date on which the charge was last incurred. If the billing party does not issue demurrage or detention invoices within the VerDate Sep<11>2014 17:02 Oct 13, 2022 Jkt 259001 required timeframe, then the billed party is not required to pay the charge. (b) If the billing party invoices the incorrect party, the correct billed party must receive an invoice within thirty (30) days from the date the incorrect party disputes the charges with the billing party. An invoice to the correct billed party must be issued within sixty (60) days after the charges were last incurred. If the billed party does not receive demurrage or detention invoices within the required timeframe, then it is not required to pay the charge. § 541.8 Requests for fee mitigation, refund, or waiver. (a) If a billed party requests mitigation, refund, or waiver of fees from the billing party, it must submit the request within thirty (30) days of receiving the invoice. (b) If a billing party receives a fee mitigation, refund, or waiver request from a billed party, the billing party must resolve the request within thirty (30) days of receiving such a request. If the billing party fails to resolve the fee PO 00000 Frm 00045 Fmt 4702 Sfmt 9990 mitigation, refund, or waiver request within the 30-day deadline, the billed party is not required to pay the charge at issue. § 541.9–541.98 [Reserved] § 541.99 OMB control number assigned pursuant to the Paperwork Reduction Act. The Commission has received Office of Management and Budget approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. In this regard, the valid control number for this collection of information is 3072– XXXX. Subpart B [Reserved] By the Commission. William Cody, Secretary. [FR Doc. 2022–22290 Filed 10–13–22; 8:45 am] BILLING CODE 6730–02–P E:\FR\FM\14OCP1.SGM 14OCP1

Agencies

Federal Maritime Commission

[Federal Register Volume 87, Number 198 (Friday, October 14, 2022)]
[Proposed Rules]
[Pages 62341-62358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22290]


=======================================================================
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FEDERAL MARITIME COMMISSION

46 CFR Part 541

[Docket No. FMC-2022-0066]
RIN 3072-AC90


Demurrage and Detention Billing Requirements

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Maritime Commission (Commission) is seeking public 
comment on a proposed rule that requires common carriers and marine 
terminal operators to include specific minimum information on demurrage 
and detention invoices and outlines certain billing practices relevant 
to appropriate timeframes for issuing invoices, disputing charges with 
the billing party, and resolving such disputes. The proposed rule 
addresses considerations identified in the Ocean Shipping Reform Act of 
2022. The proposed rule would adopt minimum information that common 
carriers must include in a demurrage or detention invoice; add to this 
list additional information that must be included in or with a 
demurrage or detention invoice; further define prohibited practices by 
clarifying which parties may be appropriately billed for demurrage or 
detention charges; and establish billing practices that billing parties 
must follow when invoicing for demurrage or detention charges.

DATES: Submit comments on or before December 13, 2022.

[[Page 62342]]


ADDRESSES: You may submit comments by using the Federal eRulemaking 
Portal at www.regulations.gov, under Docket No. FMC-2022-0066, 
Demurrage and Detention Billing Requirements. Please refer to the 
``Public Participation'' heading under the SUPPLEMENTARY INFORMATION 
section of this notice for detailed instructions on how to submit 
comments, including instructions on how to request confidential 
treatment and additional information on the rulemaking process.

FOR FURTHER INFORMATION CONTACT: William Cody, Secretary; Phone: (202) 
523-5908; Email: [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction and Background
II. Summary of Comments
III. Ocean Shipping Reform Act of 2022
IV. Discussion of Proposed Rule
    A. General Provisions
    1. Purpose of Rule
    2. Scope and Applicability
    3. Definitions
    4. Properly Issued Invoices
    B. Required Billing Information
    1. Identifying Information
    2. Timing Information
    3. Rate Information
    4. Dispute Information
    5. Certifications
    C. Billing Practices
    1. 30-Day Timeframe To Issue Demurrage or Detention Invoices
    2. Timeframes for Disputing Charges and Resolving Disputes
V. Public Participation
VI. Rulemaking Analyses

I. Introduction and Background

    As rising cargo volumes have increasingly put pressure on common 
carrier, port and terminal performance, demurrage and detention charges 
have for a variety of reasons substantially increased. For example, 
over a two-year period between 2020 and 2022, nine of the largest 
carriers serving the U.S. liner trades individually charged a total of 
approximately $8.9 billion in demurrage and detention charges and 
collected roughly $6.9 billion.\1\ On July 28, 2021, Commissioner 
Rebecca F. Dye, the Fact Finding Officer for Fact Finding Investigation 
No. 29, International Ocean Transportation Supply Chain Engagement 
(Fact Finding No. 29), recommended, among other things, that the 
Commission ``[i]ssue an [Advance Notice of Proposed Rulemaking (ANPRM)] 
seeking industry input on whether the Commission should require common 
carriers \2\ and marine terminal operators (MTOs) to include certain 
minimum information on or with demurrage and detention billings and 
adhere to certain practices regarding the timing of demurrage and 
detention billings.'' \3\ The Fact Finding Officer expressed concern 
about certain demurrage and detention billing practices and a need to 
ensure that it is clear to shippers ``what is being billed by whom'' so 
that they can understand the charges.\4\ The Commission approved this 
Fact Finding 29 recommendation on September 15, 2021.\5\
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    \1\ Fed. Mar. Comm'n, Detention and Demurrage (accessed on 
September 8, 2022), https://www.fmc.gov/detention-and-demurrage/
#:~:text=In%20dollar%20terms%2C%20the%20nine,over%20the%20two%2Dyear%
20period.
    \2\ There are two types of common carriers--vessel-operating 
common carriers, also called ocean common carriers, and non-vessel-
operating common carriers. 46 U.S.C. 40102(7), (17), (18).
    \3\ See Fact Finding Investigation No. 29, Interim 
Recommendations at 6 (July 28, 2021) (Fact Finding 29 Interim 
Recommendations), available at: https://www2.fmc.gov/ReadingRoom/docs/FFno29/FF29%20Interim%20Recommendations.pdf/.
    \4\ Fact Finding 29 Interim Recommendations at 7.
    \5\ Fed. Mar. Comm'n, Press Release, FMC to Issue Guidance on 
Complaint Proceedings and Seek Comments on Demurrage and Detention 
Billings (Sept. 15, 2021), https://www.fmc.gov/fmc-to-issue-guidance-on-complaint-proceedings-and-seek-comments-ondemurrage-and-detention-billings/.
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    On February 15, 2022, the Commission issued an ANPRM to request 
industry views on potential demurrage and detention billing 
requirements.\6\ Specifically, the Commission requested comments on 
whether a proposed regulation on demurrage and detention billing 
practices should apply to non-vessel-operating common carriers (NVOCCs) 
as well as vessel-operating common carriers (VOCCs), and whether the 
regulations should differ based on whether the billing party is a NVOCC 
or a VOCC.\7\ The Commission also requested comments on whether 
proposed regulations on demurrage and detention billings should apply 
to MTOs.\8\
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    \6\ Advance Notice of Proposed Rulemaking on Demurrage and 
Detention Billing Requirements, 87 FR 8506 (Feb. 15, 2022). See 
Docket No. 22-04, Demurrage and Detention Billing Requirements.
    \7\ 87 FR at 8507, 8508-8509 (Questions 1 and 7).
    \8\ 87 FR at 8507, 8509 (Questions 2 and 3).
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    In addition to requesting comments regarding the applicability of 
demurrage and detention billing requirements to parties such as NVOCCs 
and MTOs, the Commission also requested comments on what information 
should be required in demurrage and detention invoices.\9\ In addition 
to information necessary to identify the shipment (bill of lading 
number, container number, etc.), the Commission asked whether bills 
should include information on how the billing party calculated 
demurrage and detention charges.\10\ For example, the Commission 
requested comments on whether it should require the billing party to 
include the following information: identifying clear and concise 
container availability dates in addition to vessel arrival dates for 
import shipments; and, for export shipments, the earliest return dates 
(and any modifications to those dates) as well as the availability of 
return locations and appointments, where applicable.\11\ The Commission 
also requested comments on whether the bills should include information 
on any events (e.g., container unavailability, lack of return 
locations, appointments, or other force-majeure reasons) that would 
justify stopping the clock on charges.\12\
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    \9\ 87 FR at 8508.
    \10\ 87 FR at 8508.
    \11\ 87 FR at 8509 (Question 6).
    \12\ 87 FR at 8509 (Question 6).
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    In the ANPRM, the Commission stated that it was considering whether 
it should require common carriers and MTOs to adhere to certain 
practices regarding the timing of demurrage and detention billings. The 
Commission sought comments on whether the Commission should require 
billing parties to issue demurrage or detention invoices within 60 days 
after the charges stopped accruing.\13\ The Commission stated that the 
Uniform Intermodal Interchange Agreement (UIIA) \14\ on which the 
industry relies currently requires that invoices be issued within 60 
days and asked whether the 60-day timeframe was effective in addressing 
concerns raised by billing parties, or whether a longer or shorter time 
period would be more appropriate.\15\ In addition, the Commission 
requested comments on whether it should regulate the timeframe for 
refunds and, if so, what would be an appropriate timeframe.\16\
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    \13\ 87 FR at 8508, 8509 (Question 12).
    \14\ The UIIA is a standard industry contract that provides 
rules for the interchange of equipment between motor carriers and 
equipment providers, such as VOCCs. Participation is voluntary.
    \15\ 87 FR at 8508.
    \16\ 87 FR at 8508, 8509 (Question 14).
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II. Summary of Comments

A. General Summary

    The Commission received 82 comments in response to the ANPRM from 
81 commenters.\17\ The commenters represent the following interest 
groups:

[[Page 62343]]

VOCCs; MTOs; NVOCCs, freight forwarders, and customs brokers; motor 
carriers; and beneficial cargo owners (BCOs). The Commission also 
received comments from five entities with unknown affiliations, and 
three other commenters that did not fit into the above categories.\18\ 
Comments from these eight entities were consistent with other commenter 
categories and are captured in the discussions below. All comments are 
identified below and are available on the docket at https://www.regulations.gov by their document number (Doc. No.). They are also 
available in the Commission's Reading Room, at: https://www2.fmc.gov/readingroom/proceeding/22-04/.
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    \17\ The Commission received two comments from the Los Angeles 
Customs Brokers and Freight Forwarders Association (LACBFFA) filed 
on April 15, 2022 and April 22, 2022. The comments filed on April 
22, 2022, incorporated a new section, ``5. Multiple Parties and 
Invoiced Party Identity,'' into the comments that LACBFFA filed on 
April 15, 2022. Compare Comments of the Los Angeles Customs Brokers 
and Freight Forwarders Association (Doc. No. 57) at 3 with Comments 
of the Los Angeles Customs Brokers and Freight Forwarders 
Association (Doc. No. 83) at 3-4.
    \18\ Comments of Ellen Baicher-Armstrong (Doc. No 39); Comments 
of RPM Warehouse and Transportation (Doc. No 32); Comments of J. 
Peter Hinge (Doc. No. 9); Comments of Ocean Logistics (Doc. No. 27); 
Comments of Naomi Hime (Doc. No. 18); Comments of the International 
Warehouse Logistics Association (Doc. No. 81); Comments of 
Veconinter USA LLC (Doc. No. 63); Comments of Weber Distribution LLC 
(Doc. No. 17).
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B. VOCCs

    The Commission received comments from an individual VOCC and from 
two trade organizations that represent most of the largest VOCCs 
operating in U.S.-foreign ocean trade (collectively VOCC 
commenters).\19\ In general, VOCC commenters cautioned the Commission 
against pursuing regulation in this area. There was an overall concern 
that such a regulation could overreach and ultimately create more harm 
than good. For example, WSC warned the Commission to ``focus on 
preventing what is unreasonable as opposed to seeking to re-make the 
waterfront in the image that it believes is most desirable.'' \20\
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    \19\ Comments of Crowley Lain America Services, LLC (Doc. No. 
25); Comments of the Ocean Carrier Equipment Management Association, 
Inc. (Doc. No. 78); Comments of the World Shipping Council (Doc. No. 
61). Ocean Carrier Equipment Management Association (OCEMA) and the 
World Shipping Council (WSC) represent 22 VOCCs, including: APL, 
CMA-CGM, COSCO, Evergreen, Hamburg Sud, Hapag Lloyd, HMM, Maersk, 
MSC, ONE, Wan Hai, and Zim.
    \20\ Doc. No. 61 at 2.
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    VOCC commenters noted the existing commercial relationships and how 
solutions to issues and innovation best develop through these natural 
relationships without outside parties, such as the Commission.\21\ The 
existence of commercial relationships meant issues could be resolved in 
contractual relations and that regulations were generally unnecessary. 
VOCC commenters expressed concern about the Commission creating an 
environment where the Commission would create an unbalanced negotiation 
sphere.\22\
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    \21\ See e.g., Doc. No. 61 at 2 (``To the extent disagreements 
do arise, all parties are best served if those disagreements can be 
resolved promptly and amicably by the parties involved without the 
need for an outside adjudicator such as the FMC or an 
arbitrator.'').
    \22\ See e.g., Doc. No. 78 at 2 (``the FMC should not seek to 
right every perceived wrong or to balance every unfavorable 
commercial term in a contract by placing its thumb on the scales to 
balance the results of legitimate commercial negotiations.'').
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    VOCC commenters asserted that the existence of commercial 
relationships lends itself to innovation. These commenters expressed 
concern that regulation in this area could stifle innovation. For 
example, WSC stated, ``a fixed form and process for invoices could 
stifle digital innovation to include initiatives to do business 
electronically, including automated invoices, use of block chain 
technology, and more broadly efforts to digitize the supply chain.'' 
\23\
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    \23\ Doc. No. 61 at 3.
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    Finally, VOCC commenters also stressed that implementation of these 
changes may prove difficult. These commenters noted that they have 
developed their own billing systems and because these systems must 
exchange information, any required changes would be significantly 
difficult.\24\ OCEMA noted that it is important for ``the FMC to first 
consider technological feasibility, the scope and required time for 
systems development work that would be required to support any new 
requirements, and whether the proposed change would burden the ability 
to resolve items as part of a pre-pay process rather than a post-pay 
transaction.'' \25\
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    \24\ See e.g., Doc. No. 61 at 3 (``Every carrier and every MTO 
has its own systems, and to the extent that those systems must 
exchange information (as would be the case for many of the data 
elements/scenarios described in question 6 below), the complexity is 
multiplied by the required interactions between systems. Many of the 
billing systems involved are global systems, adding complexity to 
any required changes.'').
    \25\ Doc. No. 78 at 1-2.
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C. MTOs

    The Commission received comments from an MTO and from three MTO 
trade organizations (collectively MTO commenters).\26\ Like VOCC 
commenters, MTO commenters generally argued against any new regulation, 
particularly if such regulation would apply to MTOs.\27\ One commenter 
observed that the Commission may already consider billing in evaluating 
demurrage and detention practices and so additional regulation was 
unnecessary.\28\ Commenters claimed that current Commission regulations 
adequately protect the industry.
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    \26\ Comments of the American Association of Port Authorities 
(Doc. No. 52); Comments of Maher Terminals LLC (Doc. No. 49); 
Comments of National Association of Waterfront Employers (Doc. No. 
26); Comments of the Port of NY/NJ Sustainable Services Agreement 
(Doc. No. 68).
    \27\ See e.g., Doc. No. 49 at 2. (``Maher believes that the 
Shipping Act of 1984, as amended . . . , and the Commission's 
regulations thereunder, particularly 46 U.S.C. 41102(c) and 46 CFR 
545.4 and 545.5, provide a sufficient and flexible legal framework 
for determining the reasonableness of MTO demurrage billing 
practices.'')
    \28\ Doc. No. 26 at 2 (noted that the Interpretive Rule 
expressly recognizes the multitude of varying factors that influence 
the reasonableness of demurrage and detention charges. See 46 CFR 
545.5(f) (``Nothing in this rule precludes the Commission from 
considering factors, arguments, and evidence in addition to those 
specifically listed in this rule.'')).
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    MTO commenters also noted the unique aspects of individual 
terminals. MTO commenters expressed concern about applying a ``one size 
fits all'' approach and cautioned the Commission about the unintended 
consequences and technological difficulties of pursuing this type of 
regulation.\29\ For example, the National Association of Waterfront 
Employees (NAWE) expressed concern that establishing billing 
requirements ``will inevitably disrupt existing commercial 
relationships and could impact the competitiveness of MTOs that 
continue to face competition from neighboring foreign ports.'' \30\ 
Other MTO commenters shared this view and asserted that compliance with 
any changes would create administrative burdens that could worsen 
current supply chain issues.\31\ MTO commenters argued the costs of any 
new regulation would outweigh any benefits and cited technological 
limitations, international competition, and security concerns as 
reasons why the Commission should limit any regulation it decides to 
adopt.\32\
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    \29\ See e.g., Doc. No. 26 at 2.
    \30\ Doc. No. 26 at 2.
    \31\ See e.g., Doc. No. 52 at 6-7 (``Additional information may 
be attainable, but would demand ports engage in costly, 
administrative data collection. These efforts would significantly 
undermine streamlined operations at ports and terminals and in turn, 
generate substantial congestion and backlogs.'').
    \32\ See e.g., Doc. No. 52 at 10 (If ports are required to 
include extensive and detailed information on every billing, there 
is a national security risk that the aggregated data can be 
exploited by bad actors or competitors. Further, information 
regarding ports and terminal pricing, dwell times, and maritime 
practices risks the disclosure of business-sensitive proprietary 
information.).
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D. NVOCCs, Freight Forwarders, and Customs Brokers

    The Commission received comments from ten NVOCCs, freight 
forwarders, and customs brokers, and five trade organizations that 
represent such entities (collectively ocean transportation intermediary 
(OTI)

[[Page 62344]]

commenters).\33\ OTI commenters supported the Commission pursuing this 
regulation, but NVOCC commenters did not uniformly support applying any 
adopted regulation to NVOCCs.\34\ Most NVOCCs argued that the 
regulation should not apply to NVOCCs because NVOCCs do not determine 
demurrage or detention rates.\35\ Two NVOCCs indicated that the 
demurrage and detention billing requirements should apply to NVOCCs, 
but did not provide further explanation. However, one of these 
commenters stated that any new requirements that would apply to NVOCCs 
should differ from those that would apply to VOCCs because NVOCCs serve 
as an intermediary between the VOCCs and shippers.\36\ In contrast, 
freight forwarders and customs brokers indicated that any proposed 
demurrage and detention billing requirements should apply to VOCCs and 
NVOCCs equally as they both charge demurrage and detention fees.\37\
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    \33\ Comments of Combined Freight International KAM (Doc. No. 
16); Comments of Lance Sales, Inc. (Doc. No. 20); Comments of A 
Custom Brokerage, Inc. (Doc. No. 70); Comments of the International 
Association of Movers (Doc. No. 74); Comments of J & K Fresh LLC 
(Doc. No. 29); Comments of the Los Angeles Customs Brokers and 
Freight Forwarders Association (Doc. No 83); Comments of Mode 
Transportation, LLC (Doc. No. 13); Comments of the National Customs 
Brokers & Forwarders Association of America, Inc. (Doc. No. 62); 
Comments of the New York New Jersey Foreign Freight Forwarders and 
Brokers Association, Inc. (Doc. No. 76); Comments of the Pacific 
Coast Council of Customs Brokers and Freight Forwarders (Doc. No. 
82); Comments of Page International (Doc. No. 19); Comments of 
Mohawk Global Logistics Corporation (Doc. No. 69); Comments of 
Thunder Bolt Logistics, LLC (Doc. No. 77); Comments of the 
Transportation Intermediaries Association (Doc. No. 48); Comments of 
John S. Connor Global Logistics (Doc. No. 75).
    \34\ One commenter did not support demurrage and detention 
billing requirements regulations to address the issues, but instead 
favored an industry solution. Doc. No. 20 at 1.
    \35\ Doc. No. 16 at 1; Doc. No. 13 at 3; Doc. No. 69 at 3; Doc. 
No. 70 at 2; Doc. No. 75; Doc. No. 75 at 2; Doc. No. 76 at 2; Doc. 
No. 77 at 2. See Doc. No. 62 and Doc. No. 83 (both discuss the 
regulations as applying to VOCCs and MTOs as the billing parties). 
Some of these commenters stated that the regulations should apply to 
NVOCCs if they ``mark up'' the charge. Doc. No. 13 at 3; Doc. No. 69 
at 3; Doc. No. 75 at 2; Doc. No. 76 at 2; Doc. No. 77 at 2.
    \36\ Doc. No. 19 at 1; Doc. No. 48 at 3.
    \37\ Doc. No. 29 at 1; Doc. No. 74 at 1.
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    OTI commenters generally agreed on other questions posed in the 
ANPRM. For example, OTI commenters responded that the proposed 
regulations should apply to MTOs because they issue demurrage and 
detention charges.\38\ In addition, these commenters supported 
requiring billing parties to provide all information identified in 
Question 6 of the ANPRM as well as information on how to dispute 
charges to the billing party.\39\ Some OTI commenters stated that the 
Commission should also require billing parties to certify that the 
charges comply with the Shipping Act of 1984, as amended.\40\ These 
commenters were generally supportive of requiring billing parties to 
issue invoices within a specific timeframe (with most agreeing that the 
timeframe should be 30 days or less) and requiring billing parties to 
issue refunds within a specified timeframe.\41\
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    \38\ Doc. No. 29 at 1; Doc. No. 74 at 1; Doc. No. 16 at 1; Doc. 
No. 13 at 4; Doc. No. 69 at 1; Doc. No. 70 at 2; Doc. No. 75 at 1; 
Doc. No. 62 at 4; Doc. No. 76 at 2; Doc. No. 19 at 1; Doc. No. 77 at 
3; Doc. No. 48 at 3.
    \39\ Doc. No. 29 at 2-3; Doc. No. 74 at 1; Doc. No. 82 at 1; 
Doc. No. 16 at 2-3; Doc. No. 13 at 5, 7; Doc. No. 69 at 5, 7-8; Doc. 
No. 70 at 3, 5; Doc. No. 75 at 3-4; Doc. No. 83 at 2; Doc. No. 62 at 
4; Doc. No. 76 at 4-5; Doc. No. 19 at 2-3; Doc. No. 77 at 5, 7; Doc. 
No. 48 at 4-7. Question 6 requested comments on whether billing 
parties should be required to provide the following information on 
demurrage and detention invoices: Bill of lading number; container 
number; billing date; payment due date; start/end of free time; 
start/end of demurrage/detention/per diem clock; demurrage/
detention/per diem rate schedule; location of the notice of the 
charge (i.e., tariff, service contract number and section, or MTO 
schedule); container availability dates and vessel arrival dates for 
import shipments; for export shipments, the earliest return dates 
(and any modifications to those dates); any intervening clock-
stopping events, and whether the charge is a pass-through of charges 
levied by the MTO or port. 87 FR at 8509.
    \40\ See Doc. No. 77 at 5; Doc. No. 69 at 5; Doc. No. 75 at 3.
    \41\ Doc. No. 29 at 3; Doc. No. 19 at 3; Doc. No. 77 at 7; Doc. 
No. 48 at 6; Doc. No. 82 at 2; Doc. No. 83 at 2; Doc. No. 62 at 5; 
Doc. No. 70 at 5; Doc. No. 69 at 7; Doc. No. 75 at 4; Doc. No. 16 at 
3; Doc. No. 13 at 7.
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    These commenters also stated that if the billing party invoices 
multiple parties, that the invoice should identify all billed parties 
and the basis for billing each. Furthermore, several commenters, 
especially customs brokers, asserted that they should not receive 
demurrage and detention invoices. For example, Los Angeles Customs 
Brokers and Freight Forwarders Association (LACBFFA) observed that 
shippers often name the customs broker as the ``notify party'' for 
customs purposes, and, as a result, custom brokers may receive 
demurrage or detention invoices.\42\ Such commenters argued that 
customs brokers should not receive invoices because they have no part 
in the transportation, negotiation, handling, or inland transport, and 
that the Commission should prohibit common carriers and MTOs from 
billing parties only shown as a notify party on the Bills of 
Lading.\43\
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    \42\ Doc. No. 83 at 3.
    \43\ Doc. No. 83 at 3; Doc. No. 82 at 2-3.
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E. BCOs

    The Commission received comments from 26 BCOs and 15 trade 
organizations that represent these entities (collectively BCO 
commenters).\44\ BCO commenters generally agreed on issues raised in 
the ANPRM. For example, BCO commenters responded that the regulations 
should apply to VOCCs, NVOCCs, and MTOs equally. The majority of BCO 
commenters stated that if the entity issued demurrage or detention 
charges, then the regulation should apply.\45\ BCO commenters cited the 
need for uniform requirements to apply to all demurrage and detention 
invoices they receive, regardless of whether the billing party is

[[Page 62345]]

a VOCC, NVOCC, or MTO. However, many of these BCOs preferred not to 
receive invoices from MTOs because they have no contractual 
relationship with the MTO.\46\ Several BCO commenters expressed the 
opposite view and supported a requirement that MTOs bill the BCO 
directly to avoid additional fees from VOCCs when they pass through 
such charges.\47\
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    \44\ Comments of the Agriculture Transportation Coalition (Doc. 
No. 84); Comments of the American Association of Exporters and 
Importers (Doc. No. 65); Comments of the American Chemistry Council 
(Doc. No. 54); Comments of the American Coffee Corporation (Doc. No. 
73); Comments of Association of California Recycling Industries 
(Doc. No. 21); Comments of the Auto Care Association (Doc. No. 79); 
Comments of Bostock North America (Doc. No. 30); Comments of 
BassTech International (Doc. No. 72); Comments of Calpine 
Containers, Inc. (Doc. No. 50); Comments of Jean-Luc Carriere (Doc. 
No. 5); Comments of the Consumer Technology Association (Doc. No. 
67); Comments of Lani Ellingsworth (Doc. No. 11); Comments of 
Flooring One Source (Doc. No. 3); Comments of Braun Export (Doc. No. 
14); Comments of The Grape Company (Doc. No. 42); Comments of LG 
Electronics USA, Inc. (Doc. No. 44); Comments of The Meadows Group, 
LLC (Doc. No. 22); Comments of the Meat Import Council of America, 
North American Meat Institute, and U.S. Meat Export Federation (Doc. 
No. 64); Comments of National Association of Chemical Distributors 
(Doc. No. 58); Comments of National Association of Manufacturers 
(Doc. No. 55); Comments of the National Industrial Transportation 
League (Doc. No. 60); Comments of National Milk Producers Federation 
and U.S. Dairy Export Council (Doc. No. 43); Comments of the 
National Retail Federation (Doc. No. 53); Comments of the North 
American Home Furnishings Association (Doc. No. 80); Comments of 
David Oppenheimer and Company, I, LLC (Doc. No. 40); Comments of 
Pacific Trellis Fruit (Doc. No. 71); Comments of Pinnacle Fresh USA, 
LLC (Doc. No. 31); Comments of TBC Corporation (Doc. No. 6); 
Comments of Potential Industries, Inc. (Doc. No. 4); Comments of 
Sbrocco International, Inc. (Doc. No. 66); Comments of Sony 
Electronics Inc. (Doc. No. 37); Comments of Streamlight, Inc. (Doc. 
No. 35); Comments of Suntreat Packing & Shipping Co. (Doc. No. 38); 
Comments of The Toy Association (Doc. No. 41); Comments of 
Trelleborg Wheel Systems Americas, Inc. (Doc. No. 34); Comments of 
USA Rice (Doc. No. 28); Comments of Vivion, Inc. (Doc. No. 8); 
Comments of Westco Chemicals, Inc. (Doc. No. 36); Comments of Green 
Fresh Imports (Doc. No. 85); Comments of United Furniture 
Industries, Inc./Lane Home Furnishing (Doc. No. 86).
    \45\ See e.g., Doc. No. 67 at 2 (``[Consumer Technology 
Association] encourages the Commission to impose the same 
requirements as to minimum billing information on VOCCs, NVOCCs, and 
MTOs to facilitate industry-wide transparency.''); Doc. No. 58 at 2 
(``[VOCCs, NVOCCs, and MTOs] all charge detention and demurrage 
fees, and [the National Association of Chemical Distributors] 
strongly recommends that each be included in any proposed detention 
and demurrage billing regulation.''); Doc. No. 55 at 1-2 (``These 
requirements should apply to all parties that may be involved in 
submitting demurrage and detention bills to shippers and BCOs, 
including VOCCs, NVOCCs, and MTOs.'').
    \46\ See e.g., Doc. No. 65 at 5 (``Without a contractual 
connection between the MTO and the shipper, [American Association of 
Exporters and Importers] members don't see how this would work, and 
forcing shippers to have a contractual agreement with an MTO is not 
a good idea.''); Doc. No. 54 at 4 (``Without a contractual 
connection between the MTO and the shipper, such a requirement would 
be unworkable.''). Some BCO commenters noted, however, the invoice 
carriers send to shippers should identify the demurrage charges 
levied by the MTO to the carrier. See e.g., Doc. No. 84 at 5; Doc. 
No. 64 at 6.
    \47\ See e.g., Doc. No. 41 at 4 (its members pay demurrage to 
MTOs and detention to the carriers); Doc. No. 53 at 4 (supported 
this practice because it would help avoid VOCCs charging more than 
MTOs charge); Doc. No. 28 at 3 (over half of its survey respondents 
supported MTOs charging demurrage directly to shippers).
---------------------------------------------------------------------------

    BCO commenters generally supported requiring billing parties to 
provide all information identified in Question 6 of the ANPRM and 
information on how to dispute charges to the billing party. 
Specifically, BCO commenters cited that requiring such information 
would put the burden to support the charge on the carrier and would, 
hopefully, limit the need to dispute charges.\48\ They noted that the 
most helpful data to address disputed charges would be information 
related to stop-the-clock events, free time or charges applied when 
containers are not available for pickup, or when BCOs are unable to 
drop off containers at a terminal.\49\ BCO commenters asserted that 
having access to the type of information listed in the ANPRM would help 
them verify the charges.\50\ Some BCO commenters stated that the 
Commission should also require billing parties to certify that the 
charges comply with the Shipping Act of 1984, as amended.\51\ In 
addition, they also supported the requirement that if the billing party 
invoices more than one party, then the invoice must identify all billed 
parties and the basis for billing each party.
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    \48\ See e.g., Doc. No. 64 at 5 (the minimum requirements would 
put ``the burden on the common carrier to ensure more accurate, 
timely billing, which should, in theory, minimize superfluous 
charges and improve business practices.''); Doc. No. 67 at 2 
(minimum billing requirements ``will promote transparency for all 
parties involved in shipping transactions, help ensure 
accountability, and deter unfair business practices[.]''); Doc. No. 
58 at 2 (``A requirements for all relevant information . . . . would 
hold billing parties more accountable. It would prevent the VOCCs, 
NVOCCs, and MTOs from charging erroneous fees that shippers have 
little or no opportunities to contest.''); Doc. No. 43 at 4 
(``Shippers need a full set of details about the containers subject 
to detention or demurrage charges to effectively assure they are 
properly assessed charges.'').
    \49\ Commenters report that most disputed charges include when 
free time starts and stops; countable days and whether the ``clock 
stopping'' events, such as there were no appointments, container was 
unavailable, terminal equipment, such as chassis, was unavailable, 
etc., should reduce the charges.
    \50\ See e.g., Doc. No. 60 at 5 (including clock stopping events 
will ``facilitate the carrier to fulfill their responsibility to 
bill demurrage and detention charges to meet the incentivizing 
principle[.]''); Doc. No. 22 at 2-3 (omission of event that should 
stop the clock from invoices ``makes it impossible for shippers to 
verify whether they are actually accounted for when the final total 
is calculated.''); Doc. No. 8 at 2 (omission of minimum information 
``makes it extremely difficult for shippers to be able to verify the 
amount charged are correct.''). See also Doc. No. 3 at 2; Doc. No. 
44 at 2; Doc. No. 40 at 2; Doc. No. 35 at 2; Doc. No. 34 at 2; Doc. 
No. 64 at 5; Doc. No. 58 at 2; Doc. No. 55 at 2; Doc. No. 43 at 4.
    \51\ See e.g., Doc. No. 65 at 4; Doc. No. 84 at 4; Doc. No. 43 
at 5.
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    BCO commenters were generally supportive of requiring billing 
parties to include specific information regarding how the billed party 
may dispute a charge. Specifically, they supported requiring billing 
parties to provide contact information for disputes and instructions on 
how to file disputes or information applicable to the dispute process, 
such as when a charge may be waived or what documentation the billed 
party must submit with its request.\52\
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    \52\ See e.g., Doc. No. 60 at 8; Doc. No. 28 at 3; Doc. No. 53 
at 5; Doc. No. 43 at 5; Doc. No. 64 at 7; Doc. No. 67 at 6; Doc. No. 
84 at 5; Doc. No. 21 at 4; Doc. No. 54 at 5; Doc. No. 79 at 5.
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    Many BCO commenters supported requiring billing parties to issue 
demurrage or detention invoices within 60 days of when the charges stop 
accruing; many commenters supported a timeframe of 30 days or less.\53\ 
As discussed below, BCO commenters supported a shorter timeframe for 
issuing demurrage and detention invoices because it is more likely that 
billed parties will have the information and documents necessary to 
verify the charges. They also complained that demurrage and detention 
invoices arrive months after the charges accrued and that billed 
parties lacked the documentation necessary to verify the charge due to 
passage of time.
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    \53\ A more detailed discussion of the timeframes supported by 
specific commenters is found in section IV.C.1, which discusses the 
proposed timeframe for billing parties to issue demurrage and 
detention invoices.
---------------------------------------------------------------------------

F. Motor Carriers

    The Commission received comments from six motor carriers and four 
motor carrier trade organizations (collectively Motor Carrier 
commenters).\54\ For the most part, the Motor Carrier commenters 
expressed similar views as the BCO commenters. For example, the Motor 
Carrier commenters generally supported applying the demurrage and 
detention billing requirements to VOCCs, NVOCCs, and MTOs; requiring 
billing parties to provide all information listed in the ANPRM; 
requiring billing parties to identify all billed parties and the basis 
for each billed party; and requiring billing parties to issue invoices 
within a specific timeframe.
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    \54\ Comments of Association of Bi-State Motor Carriers (Doc. 
No. 51); Comments of Harbor Trucking Association (Doc. No. 33); 
Comments of MTI, Inc. (Doc. No. 46); Comments of Golden State 
Logistics (Doc. No. 59); Comments of IMC Companies (Doc. No. 7); 
Comments of Intermodal Association of North America (Doc. No. 24); 
Comments of Intermodal Motor Carriers Conference (Doc. No. 47); 
Comments of William H. Kopke Jr. Inc. (Doc. No. 56); Comments of 
Marine Container Services LLC (Doc. No. 45); Comments of 1634, A 
Florida LLC (Doc. No. 15).
---------------------------------------------------------------------------

    In addition, the Motor Carrier commenters expressed concern that 
billing parties frequently invoiced motor carriers, who have no 
contractual relationship with the billing parties. For example, the 
Association of Bi-State Motor Carriers (Bi-State) argued that ``motor 
carriers are not privy to the specifics of the contractual agreements 
between the shipper and billing parties, and should not be dragged into 
billing disputes.'' \55\ However, Bi-State noted that billing parties 
sometimes threatened to prevent motor carriers from picking up or 
dropping off containers due to disputes with one of the motor carrier's 
customers.\56\ As a result, Motor Carrier commenters alleged that they 
must cover the disputed charges in order to serve their other 
customers.\57\ Accordingly, the Motor Carrier commenters encouraged the 
Commission to adopt an approach that would require the billing party to 
bill the customers (BCOs or shippers) directly, as they are the parties 
who have a contractual relationship with the billing parties.\58\ As a 
result they said, motor carriers would no longer be responsible to pay 
such charges or risk business relationships with their other customers 
if one customer disputes those charges.
---------------------------------------------------------------------------

    \55\ Doc. No. 51 at 2.
    \56\ Doc. No. 51 at 2.
    \57\ Doc. No. 51 at 2; Doc. No. 47 at 2, 3.
    \58\ See e.g., Doc. No. 51 at 1 (VOCCs should bill shippers 
directly); Doc. No. 47 at 2 (supported MTOs billing shippers 
directly because motor carriers ``are not aware of separate 
contractual arrangements.''); Doc. No. 33 at 8 (their members 
indicated that demurrage and detention should be billed directly to 
contracting party).
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III. Ocean Shipping Reform Act of 2022

    After the Commission issued the ANPRM and received comments, on 
June 16, 2022, the President signed the

[[Page 62346]]

Ocean Shipping Reform Act of 2022 (OSRA 2022) into law.\59\ In OSRA 
2022, Congress amended various statutory provisions contained in Part A 
of Subtitle IV of Title 46, U.S. Code. Specifically, OSRA 2022 
prohibits common carriers from issuing an invoice for demurrage or 
detention charges unless the invoice includes specific information to 
show that the charges comply with part 545 of title 46, Code of Federal 
Regulations and applicable provisions and regulations.\60\ OSRA 2022 
then lists the minimum information that common carriers must include in 
a demurrage or detention invoice:
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    \59\ Public Law 117-146, 136 Stat. 1272 (2022).
    \60\ Public Law 117-146 at Sec. 7(a)(1), 136 Stat. at 1274 
(codified at 46 U.S.C. 41104(a)(15)).
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    (A) date that container is made available.
    (B) the port of discharge.
    (C) the container number or numbers.
    (D) for exported shipments, the earliest return date.
    (E) the allowed free time in days.
    (F) the start date of free time.
    (G) the end date of free time.
    (H) the applicable detention or demurrage rule on which the daily 
rate is based.
    (I) the applicable rate or rates per the applicable rule.
    (J) the total amount due.
    (K) the email, telephone number, or other appropriate contact 
information for questions or requests for mitigation of fees.
    (L) a statement that the charges are consistent with any of Federal 
Maritime Commission rules with respect to detention and demurrage.
    (M) a statement that the common carrier's performance did not cause 
or contribute to the underlying invoiced charges.\61\
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    \61\ Public Law 117-146 at Sec. 7(a)(2), 136 Stat. at 1275 
(codified at 46 U.S.C. 41104(d)(2)).
---------------------------------------------------------------------------

    Failure to include the required information on a demurrage or 
detention invoice eliminates any obligation of the billed party to pay 
the applicable charge.\62\ In addition, OSRA 2022 also authorizes the 
Commission to revise the minimum information that common carriers must 
include on demurrage or detention invoices in future rulemakings. The 
Commission addresses this minimum information in this proposed 
rule.\63\
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    \62\ Public Law 117-146 at Sec. 7(a)(2), 136 Stat. at 1275 
(codified at 46 U.S.C. 41104(f)).
    \63\ Public Law 117-146 at Sec. 7(a)(2), 136 Stat. at 1275 
(codified at 46 U.S.C. 41104(d)(2)).
---------------------------------------------------------------------------

    OSRA 2022 requires the Commission to initiate a rulemaking further 
defining prohibited practices by common carriers, marine terminal 
operators, shippers, and OTIs regarding the assessment of demurrage or 
detention charges.\64\ OSRA 2022 also provides that such rulemaking 
must ``only seek to further clarify reasonable rules and practices 
related to the assessment of detention and demurrage charges to address 
the issues identified in the final rule published on May 18, 2020, 
entitled `Interpretive Rule on Demurrage and Detention Under the 
Shipping Act' (or successor rule)[.]'' \65\ Specifically, the 
Commission's rulemaking must clarify ``which parties may be 
appropriately billed for any demurrage, detention, or other similar per 
container charges.'' \66\ The Commission offers that clarification in 
this proposed rule.
---------------------------------------------------------------------------

    \64\ Public Law 117-146 at Sec. 7(b)(1), 136 Stat. at 1275.
    \65\ Public Law 117-146 at Sec. 7(b)(2), 136 Stat. at 1275 
(emphasis added).
    \66\ Public Law 117-146 at Sec. 7(b)(2), 136 Stat. at 1275.
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IV. Discussion of Proposed Rule

A. General Provisions

1. Purpose of Rule
    This proposed rule would (1) adopt minimum information that common 
carriers must include in a demurrage or detention invoice that is 
listed in 46 U.S.C. 41104(d)(2); (2) add to this list additional 
information that must be included in or with a demurrage or detention 
invoice; (3) further define prohibited practices by clarifying which 
parties may be appropriately billed for demurrage or detention charges; 
and (4) establish billing practices that billing parties must follow 
when invoicing for demurrage or detention charges.
2. Scope and Applicability
    This subpart sets forth regulations governing any invoice issued by 
an ocean common carrier, MTO, or NVOCC to a billed party or their 
designated agent for the collection of demurrage or detention charges. 
This regulation does not govern the billing relationships among and 
between ocean common carriers and MTOs.
    As a preliminary matter, the Commission sought comment on to whom 
this rule should apply. Specifically, the Commission asked whether 
NVOCCs and MTOs should be bound by the requirements of the rule. The 
majority of commenters supported applying the rule to both NVOCCs and 
MTOs. The Commission has determined that the proposed rule would apply 
to MTOs and NVOCCs, as well as VOCCs, but will not regulate the billing 
arrangements between VOCCs and MTOs for the reasons discussed below.
a. Inclusion of NVOCCs
    Fact Finding No. 29 recommended that the Commission regulate the 
demurrage and detention billings and billing practices of both common 
carriers and MTOs.\67\ In its opening question to the ANPRM's list of 
requested information, the Commission asked if both NVOCCs and VOCCs 
should be included in the regulation.\68\ Most commenters supported 
applying the regulations to NVOCCs. Generally, these commenters noted 
the importance of consistency across the industry and the need for 
everyone to adhere to uniform standards.\69\ As described by the WSC, 
``[t]he need for predictable and clear billing does not change on the 
basis of whether the billing entity does or does not operate ships--the 
distinction between VOCCs and NVOCCs. The customer benefits of 
transparent and timely billing apply equally in both instances[.]'' 
\70\
---------------------------------------------------------------------------

    \67\ Fact Finding No. 29 Interim Report at 6.
    \68\ 87 FR at 8509.
    \69\ See e.g., Doc. No. 29 at 1 (stressed that ``there must be 
uniformity (One rule for demurrage and detention billing, no matter 
who bills it.)''); Doc. No. 60 at 3 (``[BCOs] are entitled to 
receive timely, accurate and explanatory billing from their 
contracted carrier whether the carriage is contracted pursuant to a 
bill of lading issued by an NVOCC or by a VOCC.'').
    \70\ Doc. No. 61 at 4.
---------------------------------------------------------------------------

    Few commenters opposed applying any proposed billing requirements 
to NVOCCs. The most common objection was that NVOCCs do not control any 
physical assets (i.e., equipment or land) to be subject to the rule and 
that usually NVOCCs treat demurrage and detention charges as a pass-
through cost.\71\ One commenter noted that because a NVOCC has to pay a 
VOCC or MTO for these types of charges, an NVOCC has no reason to hold 
back sending an invoice to a BCO because that will leave the NVOCC with 
outstanding charges to the carrier.\72\
---------------------------------------------------------------------------

    \71\ See e.g., Doc. No. 69 at 3 (``NVOCCs do not generally file 
[demurrage and detention] schedules in their tariffs and do not 
generate [demurrage and detention] charges on their own. Instead, 
[these] charges originate with VOCCs and MTOs, and are merely passed 
through by NVOCCs as facilitators of the transaction.'').
    \72\ Doc. No. 13 at 4 (``there is no logic in the NVOCC 
unreasonably delaying billing or notifying the customer. The NVOCC 
is the party who is being billed by the carrier/terminal and will 
have the outstanding payables due to the carrier, so clearly, there 
is no general logic that encourages them to delay billing to their 
end customer.'').
---------------------------------------------------------------------------

    Although most NVOCCs are only passing through charges to BCOs, that 
does not change the fact that some NVOCCs invoice BCOs for demurrage 
and detention.\73\ BCOs employing an

[[Page 62347]]

NVOCC generally do not interact with VOCCs and, as a result, the 
demurrage or detention invoice BCOs receive from an NVOCC may be their 
only notice about the origin and breakout of these charges. 
Additionally, because of its contractual relationship with the BCO, an 
NVOCC is often the only party in this transaction able to inform BCOs 
as to the nature of these charges. Furthermore, there is a greater need 
for transparency when the NVOCCs markup demurrage or detention charges 
assessed by VOCCs or MTOs or when NVOCCs charge demurrage or detention 
based on their own tariff rules or negotiated agreements.
---------------------------------------------------------------------------

    \73\ NVOCCs may also issue invoices that charge demurrage or 
detention based on their own tariff rules or negotiated rates. In 
addition, NVOCCs may also mark-up the demurrage or detention charge 
assessed by a VOCC or MTO.
---------------------------------------------------------------------------

    Ultimately, this regulation is an outgrowth of the work done in 
Fact Finding No. 29. As noted in the Final Report, ``[t]hroughout the 
Fact Finding, industry members reported confusion about the information 
contained in invoices.'' \74\ As discussed below, the intent of this 
rulemaking is to ensure that the person receiving the bill understands 
the charges regardless of whether the billing party is a VOCC, NVOCC, 
or an MTO.\75\
---------------------------------------------------------------------------

    \74\ Fact Finding Investigation 29: Final Report at 51 (May 31, 
2022) (Fact Finding 29 Final Report), available at: https://www.fmc.gov/wp-content/uploads/2022/06/FactFinding29FinalReport.pdf.
    \75\ See Fact Finding 29 Interim Recommendations at 6 
(recommending a rulemaking on demurrage and detention billing 
requirements so that the person receiving the bill understands 
``what is being billed and by whom.'').
---------------------------------------------------------------------------

b. Inclusion of MTOs
    MTOs often do not have direct contractual relationships with 
shippers. Instead, MTOs usually have contractual relationships with 
VOCCs, such as through terminal services agreements.\76\ However, an 
MTO may separately assess demurrage as an implied contract in a court 
of law, provided that demurrage rates are published as part of the 
MTO's rate schedule.\77\
---------------------------------------------------------------------------

    \76\ See 46 CFR 535.309.
    \77\ 46 U.S.C. 40501(f); 46 CFR 525.2.
---------------------------------------------------------------------------

    Commenters overwhelmingly argued that the proposed rule should 
apply to MTOs. Again, while the most common practice is for the MTO to 
invoice the VOCC and the VOCC to send a combined invoice to the 
shipper, several commenters also noted that in some cases MTOs bill 
shippers directly.\78\ MTOs were generally opposed to the proposed 
regulations, citing that traditionally they do not invoice shippers 
directly, but instead work with VOCCs.\79\
---------------------------------------------------------------------------

    \78\ See e.g., Doc. No. 61 at 4 (``MTOs can and do bill for 
demurrage, and there are multiple business models at ports around 
the country under which carriers bill on behalf of MTOs and vice 
versa.'')
    \79\ See e.g., Doc. No. 49 at 2; Doc. No. 26 at 3.
---------------------------------------------------------------------------

    The Commission's primary concern with this proposed regulation is 
to ensure billed parties understand the demurrage or detention invoices 
they receive. Although, at least under the traditional process, it 
appears that MTOs rarely interact with anyone other than the VOCC, in 
those cases where an MTO invoices a shipper, the MTO should be subject 
to the same regulations that apply to VOCCs and NVOCCs.
c. MTO and VOCC Relationships
    This proposed regulation does not govern the billing relationships 
among and between VOCCs and MTOs. As noted earlier, the purpose of the 
proposed rule is to identify the minimum information billing parties 
must include on demurrage and detention invoices, and to improve the 
invoices' clarity. Although the Fact Finding No. 29 Final Report noted 
that shippers reported confusion about information contained in 
demurrage and detention invoices, the Fact-Finding Officer did not 
receive similar concerns from VOCCs about invoices they were receiving 
from MTOs.\80\
---------------------------------------------------------------------------

    \80\ Fact Finding 29 Final Report at 51. See e.g., Coalition for 
Fair Port Practices Petition for Rulemaking, FMC Docket No. P4-16, 
(Dec. 7, 2016); Fact Finding Investigation No. 28: Final Report, 
(Sep. 4, 2018), available at: https://www2.fmc.gov/readingroom/docs/FF%20No.%2028/FF28_int_rpt2.pdf/.
---------------------------------------------------------------------------

    The ANPRM specifically asked whether the proposed regulation should 
apply to the format in which MTOs bill VOCCs.\81\ Most OTI, BCO, and 
Motor Carrier commenters answered this question by discussing invoices 
they receive from carriers and the need to have charges originating 
from an MTO and charges originating from a VOCC distinguished.\82\ This 
fact suggests that the primary concern that needs to be addressed in 
this proposed regulation is not the billing interactions between MTOs 
and VOCCs, but rather transparency and clarity on invoices issued to 
OTIs, shippers, and motor carriers.
---------------------------------------------------------------------------

    \81\ 87 FR at 8509.
    \82\ See e.g., Doc. No. 37 at 2 (noted that ``charges should be 
properly distinguished and identified so that by reviewing a bill 
the invoiced party can determine which charges are being passed 
along by VOCCs and which charges are being billed directly to the 
invoiced party in the first instance.'').
---------------------------------------------------------------------------

    Further, many MTOs and MTO trade organizations also argued that 
regulations in this realm were not warranted. For example, the NAWE 
explained, ``[t]he unique commercial relationships negotiated between 
VOCCs and MTOs have not been the source of demurrage complaints.'' \83\ 
Other commenters cited the close commercial relationship shared by MTOs 
and VOCCs, which, they argued, made additional regulation 
unnecessary.\84\
---------------------------------------------------------------------------

    \83\ Doc. No. 26 at 3. See Doc. No. 60 at 3 (``the assessment of 
the terms and charges by [MTOs] on [VOCCs] has not so far been a 
part of the scope of Fact Finding Investigation 28''); Doc. No. 49 
at 3 (``Maher has not received any feedback from its carrier 
customers and other Terminal users that its free time and demurrage 
policies and practices are unclear or confusing, or that further 
regulations are necessary to improve clarity with respect to such 
policies and practices.'').
    \84\ Doc. No. 49 at 3 (``The Commission should not adopt a 
demurrage billing regulation that includes MTOs, let alone one that 
regulates the format in which MTOs charge demurrage to VOCCs. To the 
extent that Maher charges demurrage directly to its VOCC customers, 
as opposed to other Terminal users, those arrangements are set forth 
in privately negotiated, arms-length terminal service agreements, 
which are subject to tailored governing law and dispute resolution 
provisions.'').
---------------------------------------------------------------------------

    The Commission received a few comments from VOCCs who favored 
extending regulations to cover the invoicing from MTOs to VOCCs. These 
comments were generally about maintaining accurate information 
throughout the process.\85\ VOCC commenters stressed the importance of 
applying consistent information requirements at each stage in the 
supply chain.\86\
---------------------------------------------------------------------------

    \85\ Doc. No. 61 at 4 (``It would be impractical if charges 
originating with MTOs, but potentially collected by common carriers, 
were not subject to the same minimum standards regarding included 
information. To the extent that a charge may be handled by multiple 
parties--whether on an agency basis or as a pass-through--it is 
critical that the relevant information be available to all parties 
in the chain.'').
    \86\ See e.g., Doc. No. 78 at 3 (``OCEMA has no position on this 
issue at this time. However, OCEMA stresses the importance of 
consistency and transparency throughout the supply chain with 
respect to any information requirements imposed on VOCCs.'').
---------------------------------------------------------------------------

    Notwithstanding the comments from OCEMA and WSC, the Commission has 
not received comments responding to the ANPRM or elsewhere that 
expressed concerns about the relationships or interactions between 
VOCCs and MTOs that warrant regulating the format used by MTOs to bill 
VOCCs. The Commission notes the strong commercial relationships between 
MTOs and VOCCs and is confident that these current contractual 
relationships will continue to ensure that the proper information is 
shared and that the party who ultimately receives the invoice is 
receiving accurate information. Thus, the Commission concludes that at 
this time it is not necessary to impose minimum billing information 
requirements for MTO invoices issued to VOCCs.

[[Page 62348]]

3. Definitions
a. Demurrage or Detention
    For purposes of this proposed rule, the Commission defines the 
terms ``demurrage or detention'' broadly to include any charge assessed 
by common carriers and marine terminal operators related to the use of 
marine terminal space or shipping containers. This proposed definition 
is the same as the scope used in 46 CFR 545.5(b). The goal is to 
encompass all charges having the purpose or effect of demurrage or 
detention regardless of the labels given to those charges. Under this 
definition, for instance, a charge assessed by a common carrier for the 
use of containers outside a marine terminal would fall within the scope 
of this rule regardless of whether the charge was called ``detention'' 
or ``per diem.'' Similarly, a charge assessed because a container is 
taking up terminal space would fall within the scope of this rule even 
if the billing party called the charge something other than 
``demurrage.'' Like the scope denoted in 46 CFR 545.5, the proposed 
rule specifically limits these definitions to ``shipping containers'' 
and excludes charges related to other equipment, such as chassis, 
because depending on the context, ``per diem'' can refer to containers, 
chassis, or both.
    As previously expressed during the Commission's interpretive 
rulemaking at 46 CFR 545.5, the Commission supports defining demurrage 
and detention charges based on what asset is the source of the charge 
(land or container) as opposed to the location of a container (inside 
or outside a terminal).\87\ In that prior rulemaking, the Commission 
discouraged use of terms such as ``storage'' and ``per diem'' as 
synonyms for demurrage and detention because these terms add additional 
complexity. The Commission reiterates those statements here and notes 
that, despite how it may be used in the industry, to ensure clarity the 
Commission generally favors using the term ``per diem'' to refer to the 
use of chassis.
---------------------------------------------------------------------------

    \87\ Interpretive Rule on Demurrage and Detention Under the 
Shipping Act Final Rule, 85 FR 29638, 29666 (May 18, 2020) (codified 
at 46 CFR 545.5).
---------------------------------------------------------------------------

b. Demurrage or Detention Invoice
    The Commission proposes to broadly defining the term ``demurrage or 
detention invoice'' as meaning any statement, printed, written, or 
accessible online, that documents an assessment of demurrage or 
detention charges. By proposing a broad definition, the Commission 
intends the definition to include the existing variety of methods 
employed by common carriers and MTOs to invoice shippers, and to leave 
room for improvement of existing systems or adopting of any new, 
innovative invoicing methods.
    The Commission received a few comments asking it to institute 
requirements on how invoices are displayed or presented to 
shippers.\88\ Although there are a variety of existing methods to 
display and deliver this information, the Commission does not perceive 
a problem necessitating a regulatory solution at this time. The 
Commission intends the proposed definition to encompass the many 
existing and potential future methods that a bill might be presented 
and does not indicate a preference or requirement.
---------------------------------------------------------------------------

    \88\ See e.g., Doc. No. 62 at 4-5 (``One way to make invoices 
more accessible is to provide recipients with a digital copy of the 
invoice (for example, through an electronic portal or online source) 
rather than solely by hardcopy.''); Doc. No. 81 at 2 (``Invoices 
should be readily available (i.e. online) so NVOCCs can provide 
statements to their customers.'').
---------------------------------------------------------------------------

c. Billed Party
    The Commission is proposing to define ``billed party'' as meaning 
the person receiving the demurrage or detention invoice and who is 
responsible for the payment of any incurred demurrage or detention 
charge. In the Commission's view, this proposed definition would best 
capture the intended scope of this term and eliminate any potential 
ambiguity as to its coverage.
d. Billing Party
    This proposed rule would define the term ``billing party'' as 
meaning the VOCC, NVOCC, or MTO who issues a demurrage or detention 
invoice. The Commission acknowledges that, currently, in most 
circumstances the billing party will be a VOCC. For purposes of this 
proposed rule, this term is defined broadly to incorporate the 
occasions when an MTO or an NVOCC may issue a demurrage or detention 
invoice.
e. Billing Dispute
    The term ``billing dispute'' would mean any disagreement with 
respect to the validity of the charges, or the method of their 
invoicing raised by the billed party or their agent to the billing 
party. This proposed definition, and more generally, this proposed 
rule, does not indicate a preference or requirement for the format in 
which a dispute may be raised. Instead, the Commission proposes a broad 
definition that incorporates all types of disputes raised by a billed 
party upon receiving a demurrage or detention invoice.
4. Properly Issued Invoices
    OSRA 2022 directs the Commission to initiate a rulemaking that 
seeks to ``further clarify reasonable rules and practices related to 
the assessment of detention and demurrage charges[.]'' \89\ 
Specifically, OSRA 2022 instructs the Commission to address ``which 
parties may be appropriately billed for any demurrage, detention, or 
other similar per container charge.'' \90\ Under the proposed rule, a 
properly issued invoice is an invoice that is only issued to the person 
that has contracted with the billing party for the carriage of goods or 
space to store cargo, and is therefore the person responsible for the 
payment of any incurred demurrage or detention charge. This is often 
the shipper of record. The proposed rule would prohibit billing parties 
from issuing demurrage and detention invoices to persons other than the 
person for whose account the billing party provided ocean 
transportation or storage.
---------------------------------------------------------------------------

    \89\ OSRA 2022, Section 7(b)(2).
    \90\ OSRA 2022, Section 7(b)(2).
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    As a result of anecdotal reports indicating that billing parties 
sometimes sent invoices to multiple parties for the same shipments, the 
Commission asked whether this practice occurred regularly.\91\ Many 
commenters described a current, wide-spread practice where the billing 
party sends the invoice to multiple parties, most of whom are not the 
recipient of the service giving rise to the invoiced charge.\92\ The 
current system, in which parties who did not negotiate contract terms 
with the billing party are nonetheless bound by them, creates 
additional confusion and hardship and exacerbates problems in the 
supply chain. For example, one commenter noted that this practice often 
results in disputes among the parties.\93\ Other commenters noted that 
invoicing multiple parties results in duplicative payments, which 
further complicates resolving invoice disputes.\94\
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    \91\ 87 FR at 8508-8509.
    \92\ See e.g., Doc. No. 44 at 3; Doc. No. 37 at 2; Doc. No. 19 
at 2; Doc. No. 15 at 3; Doc. No. 13 at 5-6; Doc. No. 8 at 3; Doc. 
No. 47 at 6; Doc. No. 48 at 5.
    \93\ Doc. No. 53 at 4.
    \94\ Doc. No. 28 at 2 (``According to most survey respondents, 
common carriers invoice multiple parties for demurrage and/or 
detention charges sometimes resulting in duplicative payments''); 
Doc. No. 13 at 6 (``We also see invoices being sent on the same 
container to multiple parties, and at times, it is paid more than 
once[.]'').
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    Although the Commission did not specifically request comments on 
prohibiting billing parties from

[[Page 62349]]

invoicing anyone except the party who contracted for the service 
(usually the shipper), the Commission received many comments urging it 
to adopt such regulations.\95\ Commenters expressed frustration at the 
practice of billing demurrage and detention charges to parties who have 
not agreed to the charges or are not otherwise liable.\96\ Other 
commenters suggested that common carriers bill third parties to shield 
customer relationships.\97\
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    \95\ See e.g., Doc. No. 82 at 4; Doc. No. 56 at 3; Doc. No. 33 
at 3; Doc. No. 51 at 1.
    \96\ See e.g., Doc. No. 84 at 5 (``The carrier may not invoice a 
party merely because the carrier has expanded the list of parties 
which it includes as a merchant in its B/L'').
    \97\ See Doc. No. 82 at 4 (``The carriers are billing the party 
of least resistance. It appears the first and easiest choice under 
the ``Merchant Clause'' is to bill the US customs broker on import 
shipments as there would be minimal effort on the carrier's part 
(since the carrier's shipper may be based overseas), and the carrier 
prefers to avoid imposing detention/demurrage on a current or future 
customer BCO. Instead, the carrier lawyers pursue a small US customs 
broker with whom the carrier has not had, and likely will never 
have, any commercial relationship.'').
---------------------------------------------------------------------------

    Commenters who supported such a regulation generally agreed with 
the concept that only the parties to the contract (usually the shipper 
and common carrier), have insight into the contractual agreements 
between the shipper and common carrier.\98\ Because third parties lack 
direct involvement and information, most would not be privy to the 
demurrage and detention terms negotiated by the parties to the original 
contractual agreement, and therefore are at a disadvantage if pulled 
into a dispute over such charges. One specific instance where not being 
a party to the contract is a disadvantage is in determining free time. 
As one commenter explained:
---------------------------------------------------------------------------

    \98\ Doc. No. 51 at 1 (``Members feel strongly that the VOCC 
should bill the customers directly, as they are the parties who 
formed the agreement. This would remove the drayage carrier from the 
equation, reduce confusion, and keep the business relationships 
clear.'').
---------------------------------------------------------------------------

    ``Motor carriers are not a party to contracts and may not be aware 
of contractual allowances for free time. Yet motor carriers receive 
these invoices and are then responsible for working with ocean carriers 
and shippers to determine which contract the shipment was under and 
whether it allowed for additional free time beyond what has been 
billed.'' \99\
---------------------------------------------------------------------------

    \99\ Doc. No. 47 at 2.
---------------------------------------------------------------------------

    Other commenters also described the difficulty of verifying the 
accuracy of charges when they were not party to the agreements that 
determine the allotted free time.\100\
---------------------------------------------------------------------------

    \100\ See Doc. No. 33 at 3 (``If a motor carrier is paying 
demurrage, it is impossible to know if the billing is accurate since 
the motor carrier is not party to the contractual arrangements and 
agreed upon free time. On detention and per diem, since Motor 
Carriers are in possession of the containers under the interchange, 
they are constantly surveying the restrictions that exist for return 
of the container. However, motor carriers are still not party to the 
contract and subsequent free time agreements and therefore must work 
with shippers to determine which contract the shipment was under and 
if there was additional free time available from what was billed. 
This is another reason why only billing between contracting parties 
should be allowed. Motor carriers are not party to these contracts 
and therefore should not be billed.'').
---------------------------------------------------------------------------

    The Commission understands the concerns with invoices being sent to 
those individuals without a contractual relationship and acknowledges 
that this practice exacerbates dispute resolution and efficient 
movement of cargo. As was pointed out in the Final Report of the Supply 
Chain Innovation Team Initiative, the ``United States international 
supply chain is a complex, dynamic ecosystem'' and the ``lack of direct 
customer relationships between actors in this system (such as shippers 
and terminals) impedes cooperative problem-solving, exacerbates 
disruptions . . . and makes recovering from disruptions more 
difficult[.]'' \101\ This is exactly the case here where motor 
carriers, custom brokers, and others who do not have customer 
relationships with common carriers are being asked to resolve disputes.
---------------------------------------------------------------------------

    \101\ Supply Chain Innovation Initiative: Final Report at 3 
(Dec. 5, 2017), available at: https://www.fmc.gov/assets/1/Page/SCITFinalReport-reduced.pdf.
---------------------------------------------------------------------------

    Many commenters also acknowledged the value of commercial 
relationships within the system. For example, many commenters opposed 
requiring MTOs to bill shippers directly because of a lack of direct 
commercial relationship.\102\ Other commenters cited the value of the 
existing relationships between MTOs and VOCCs and the benefit it brings 
to the supply chain. For example, the National Industrial 
Transportation League noted, ``[t]he commercial relationship between 
[VOCCs] and their MTO partners should be valued for its ability to 
bring benefit to the ocean delivery system and, by extension, to the 
shipping public in a way that the transactional relationship between 
[BCOs] and [MTOs] cannot.'' \103\ Parties involved in a continuous 
commercial relationship have made an investment in that relationship 
and are highly motivated to timely and effectively resolve problems as 
they arise in order to maintain a mutually beneficial, ongoing 
relationship.
---------------------------------------------------------------------------

    \102\ See e.g., Doc. No. 52 at 8 (``Ports and MTOs do not bill 
directly to shippers or cargo owners; their strongest relationship 
lies with ocean carriers, whom they enter into contracts and 
interface with daily.''); Doc. No. 54 at 4 (``Without a contractual 
connection between the MTO and the shipper, such a requirement would 
be unworkable.'').
    \103\ Doc. No. 60 at 6. See Doc. No. 72 at 6.
---------------------------------------------------------------------------

    The Commission believes that prohibiting billing parties from 
issuing demurrage and detention invoices to persons with whom they do 
not have a genuine commercial relationship will similarly benefit the 
supply chain. If the billed party has firsthand knowledge of the terms 
of its service contract with a common carrier, then they are in a 
better position to ensure that both they and the carrier are abiding by 
those terms. When demurrage or detention invoice disputes do arise, the 
billed party is in a better position than third parties such as 
truckers and customs brokers to analyze the accuracy of the charge. 
Further, when the billed party disputes a charge, they have an existing 
commercial relationship with the billing party and are in a better 
position to resolve the dispute.
    Practically, the proposed rule would prohibit billing parties from 
invoicing motor carriers or customs brokers. If adopted, the proposed 
rule would not prevent motor carriers from paying on behalf of the 
billed party. Although a motor carrier could pay on behalf of a billed 
party, the motor carrier would not be liable for these charges and 
could not be penalized for nonpayment of charges. Although this 
arrangement is different from many of the billing systems currently 
employed, it would not be unprecedented. During Fact Finding 
Investigation No. 28, the Commission sought information on how 
contractual relationships, policies, and practices regarding demurrage 
and detention in the United States differ from those in other maritime 
nations. The Commission received information that, in other nations, 
VOCCs collect demurrage and detention charges (often combined), 
directly from shippers rather than motor carriers.\104\
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    \104\ Fact Finding Investigation No. 28 Final Report at 3, Fed. 
Mar. Comm'n (Sep. 4, 2018), available at: https://www2.fmc.gov/readingroom/docs/FF%20No.%2028/FF28_int_rpt2.pdf/.
---------------------------------------------------------------------------

    Under the proposed rule, only the person who contracted with the 
common carrier for the carriage or storage of goods may be issued an 
invoice. The Commission is aware that there are a variety of shipping 
arrangements that allocate risks, obligations, and costs between the 
shipper and the consignee named on the bill of lading. Considering 
these arrangements, the Commission is specifically seeking comment on 
whether it would be appropriate to also include the consignee named on 
the bill of lading as another person who may

[[Page 62350]]

receive a demurrage or detention invoice. Including the consignee named 
on the bill of lading as an appropriately billed party for demurrage or 
detention charges in the Commission's proposed rule would memorialize 
an existing industry practice and allow the common carrier to bill 
either the person who contracted for the shipment of the cargo or 
consignee named on the bill of lading.
    In sum, the proposed rule should simplify the current system and 
ensure that only the person with the most knowledge about the shipment 
and who is in the best position to understand and dispute the charge 
receives a demurrage or detention invoice. 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. 
Therefore, the proposed rule would prohibit such a practice and require 
that only the person that has contracted with the billing party for the 
carriage or storage of goods receive an invoice for incurred demurrage 
or detention charges.

B. Required Billing Information

    In the ANPRM, the Commission requested comment on the minimum 
information that should be required on billings.\105\ Specifically, the 
ANPRM requested comment on whether it should require demurrage and 
detention invoices to include information necessary to identify the 
shipment (bill of lading number, container number, etc.); information 
on how the chargers were calculated (container availability date, 
vessel arrival dates for import shipments and earliest return date for 
export shipments, etc.); and information on events that justify 
stopping the clock on charges (e.g., container unavailability, lack of 
return locations, lack of appointments, other force majeure 
reasons).\106\ An overwhelming number of commenters supported the 
Commission requiring all of the information listed under Question 6 of 
the ANPRM. However, a small number of commenters opposed such a 
requirement. For example, NAWE, American Association of Port 
Authorities, and Port of NY/NJ Sustainable Services Agreement commented 
that some information listed in the ANPRM may be extremely burdensome 
or impossible to provide.\107\ In addition, Maher believed that marine 
terminals should provide basic information on demurrage charges but did 
not support requiring one-size-fits-all billing information.\108\
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    \105\ 87 FR at 8508-8509.
    \106\ 87 FR at 8508. See Question 6, 87 FR at 8509.
    \107\ Doc. No. 26 at 5; Doc. No. 52 at 7; Doc. No. 68 at 1.
    \108\ Doc. No. 49 at 3.
---------------------------------------------------------------------------

    OSRA 2022 requires common carriers to include the following 
information on demurrage and detention invoices: the date that the 
container is made available; the port of discharge; the container 
number or numbers; for exported shipments, the earliest return date; 
the allowed free time in days; the start date of free time; the end 
date of free time; the applicable detention or demurrage rule on which 
the daily rate is based; the applicable rate or rates per the 
applicable rule; the total amount due; the email, telephone number, or 
other appropriate contact information for questions or requests for 
mitigation of fees; a statement that the charges are consistent with 
any of Federal Maritime Commission rules with respect to detention and 
demurrage; and a statement that the common carrier's performance did 
not cause or contribute to the underlying invoiced charges.\109\
---------------------------------------------------------------------------

    \109\ Public Law 117-146 at Sec. 7(a)(2), 136 Stat. at 1275 
(codified at 46 U.S.C. 41104(d)(2)).
---------------------------------------------------------------------------

    The proposed rule would require common carriers and MTOs to include 
all the information required in 46 U.S.C. 41104(d)(2), listed above on 
demurrage or detention invoices. The proposed rule also would require 
billing parties to include minimum information in addition to the 
information listed in 46 U.S.C. 41104(d)(2) to include specific 
identifying, timing, rate, and dispute resolution information, 
discussed in detail below. The Commission requests comments on whether 
it should require billing parties to include all the proposed 
information in demurrage and detention invoices. If the commenter 
opposes any of the proposed requirements, they should identify the 
information and the obstacles or burden to including such information 
on demurrage or detention invoices. If the commenter supports the 
proposed required information, they should explain how the specific 
information will assist them in verifying the accuracy of the charge or 
ascertaining how the charge was calculated.
1. Identifying Information
    Under the proposed rule, the invoice must contain sufficient 
information to enable the billed party to identify the container(s) to 
which the charges apply, including: the bill of lading number(s); the 
container number(s); for imports, the port(s) of discharge; and the 
basis for why the invoiced party is the proper party of interest and 
thus liable for the charge. OSRA 2022 requires that invoices include 
the port of discharge and the container number.\110\ The proposed rule 
clarifies that billing parties must only include ports of discharge for 
import shipments because providing the port of discharge on a demurrage 
or detention invoice would be less useful in the context of export 
shipments. The proposed rule would also require billing parties to 
include the bill of lading number and the basis for why the billed 
party was invoiced. Commenters expressed support for requiring billing 
parties to include the container number, bill of lading number, and 
basis for why the billed party is the proper party in interest. The 
ANPRM did not request comments on whether the invoice should include 
the port of discharge for import shipments.
---------------------------------------------------------------------------

    \110\ 46 U.S.C. 41104(d)(2)(B) and (C).
---------------------------------------------------------------------------

a. Bill of Lading Number
    The Commission received many comments in favor of including the 
bill of lading number as required information. Several commenters noted 
that without the bill of lading number it would be difficult to 
determine which shipment is being charged and to verify the accuracy of 
the charge.\111\ However, the Commission received one comment that 
opposed such a requirement. OCEMA stated that the bill of lading number 
is not provided to billed parties that are not party to the 
transportation contract because disclosure may present a risk of 
violating legal or contractual non-disclosure requirements.\112\ In 
response to this comment, the Commission notes that bill of lading 
numbers are available through publicly accessible import and export 
data systems, such as PIERS. In addition, the proposed rule would 
prohibit the billing party from issuing demurrage or detention invoices 
to a person other than the person for whose account the billing party 
provided ocean transportation or space to store goods. Further, 
commenters observed that demurrage and detention invoices already 
include bill of lading numbers.\113\ Because the bill of lading number 
provides valuable identifying information to the billed party, the 
Commission proposes requiring this information on demurrage and 
detention invoices.
---------------------------------------------------------------------------

    \111\ See e.g., Doc. No. 22 at 2.
    \112\ Doc. No. 78 at 4.
    \113\ Doc. No. 52 at 7; Doc. No. 49 at 4.

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[[Page 62351]]

b. Basis for Why Party Was Invoiced
    The Commission received numerous comments asserting that billing 
parties issue invoices to multiple parties for the same charges and 
this sometimes results in duplicative payments.\114\ Many commenters 
supported requiring billing parties to include the basis for why a 
party has been invoiced and is thus liable for the charge. Requiring 
billing parties to identify the basis for why billed parties are liable 
for the charge would enable billed parties to confirm that they are 
correctly billed the invoiced charges. The proposed rule is consistent 
with proposed Sec.  541.4 that would prohibit billing parties from 
issuing demurrage and detention invoices to persons other than the 
person for whose account the billing party provided ocean 
transportation or space to store goods. Because the invoice would 
identify the basis for why the billed party is liable for the charge, 
they would be able to confirm that the billing party could issue an 
invoice to them under proposed Sec.  541.4.
---------------------------------------------------------------------------

    \114\ See e.g., Doc. No. 13 at 5-6; Doc. No. 15 at 3; Doc. No. 
18 at 2; Doc. No. 19 at 2; Doc. No. 37 at 2; Doc. No. 28 at 2.
---------------------------------------------------------------------------

2. Timing Information
    The invoice must contain sufficient information to enable the 
billed party to identify the relevant time for which the charges apply 
and the applicable due date for the invoiced charges, including: the 
billing date; the billing due date; the allowed free time in days; the 
start date of free time; the end date of free time; for imports, the 
container availability date; for exports, the earliest return date; and 
the specific date(s) for which demurrage or detention were charged. 
OSRA 2022 requires that invoices include the date the container is made 
available; for exported shipments, the earliest return date; the 
allowed free time in days; the start date of free time; and the end 
date of free time.\115\ The proposed rule clarifies that the billing 
parties must only provide container availability date for import 
shipments. The proposed rule would also require billing parties to 
specify the dates for which demurrage and/or detention charges accrued, 
the billing date, and the billing due date.
---------------------------------------------------------------------------

    \115\ 46 U.S.C. 41104(d)(2)(A), (E)-(G).
---------------------------------------------------------------------------

a. Dates Demurrage or Detention Charges Accrued
    The Commission received numerous comments in response to the ANPRM 
that indicated that invoices should reflect any ``clock-stopping'' 
events that would prevent the return of equipment, such as container 
unavailability or lack of return locations or appointment times.\116\ 
OCEMA, however, opposed such a requirement and stated that this type of 
information is not always known at the time of invoicing and would 
therefore pose a risk of delaying the payment process and disrupt the 
flow of cargo.\117\ Further, OCEMA asserted that information such as 
container and appointment availability are sourced from third party 
systems and therefore the timing and feasibility of providing this 
information is unknown.\118\ WSC noted that carriers do not have 
visibility to such ``clock-stopping'' events and that shippers or motor 
carriers are more aware of challenges to container pick-up and drop-
off.\119\ Maher also commented that it does not provide ``clock-
stopping events'' on their invoices because of the cost and 
administrative burden to providing such information.\120\
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    \116\ See e.g., Doc. No. 13 at 5; Doc. No. 14 at 2; Doc. No. 15 
at 2; Doc. No. 16 at 2; Doc. No. 17 at 2; Doc. No. 18 at 2; Doc. No. 
19 at 2; Doc. No. 21 at 3; Doc. No. 29 at 2; Doc. No. 30 at 1; Doc. 
No. 44 at 2; Doc. No. 83 at 2.
    \117\ Doc. No. 78 at 5.
    \118\ Doc. No. 78 at 5.
    \119\ Doc. No. 61 at 7.
    \120\ Doc. No. 49 at 4.
---------------------------------------------------------------------------

    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 proposed rule 
incorporates the intent of OSRA 2022 to shift the burden to billing 
parties to justify the demurrage or detention charges while allowing 
billing parties to correct invoices when the intervening events are not 
initially known to them.
b. Billing Date and Payment Due Date
    The proposed rule would require the billing party to include the 
invoice billing date and payment due date. The proposed requirement to 
include the billing date and the payment due date will enable the 
billed party and the Commission to confirm that the billing parties are 
adhering to the proposed billing practices outlined in proposed Sec.  
541.7. If the billed party has the billing date information, they can 
confirm that the billed party issued the invoice within 30 days from 
when the charge was last incurred. In addition, providing the payment 
due date would notify the billed party of when they must pay the 
invoiced charges.
3. Rate Information
    The invoice must contain sufficient information to enable the 
billed party to identify the amount due and readily ascertain how that 
amount was calculated, including: the total amount due; the applicable 
detention or demurrage rule (i.e., the tariff name and rule number or 
applicable service contract number and section) on which the daily rate 
is based; and the specific rate or rates per the applicable tariff rule 
or service contract. The proposed rule incorporates the rate 
information requirements contained in OSRA 2022.\121\ It also clarifies 
that when billing parties provide the applicable detention or demurrage 
rule on which the daily rate is based, the billing party should provide 
sufficient detail so that the billed party is able to locate the 
specific rate that should apply and confirm that the invoice includes 
the correct rate. Under the proposed rule, demurrage and detention 
invoices would include information necessary to ascertain the rate that 
the billing party applied, grounds for applying that rate, dates for 
which the billing party charged the rate, and the total amount due. 
This enhanced transparency will enable billed parties to efficiently 
confirm the charges and decide whether to dispute the invoiced charges.
---------------------------------------------------------------------------

    \121\ 46 U.S.C. 41104(d)(2)(H)-(J).
---------------------------------------------------------------------------

    A commenter expressed concern that providing the applicable 
detention or demurrage rule on which the daily rate is based could 
``undermine service contract confidentiality.'' \122\ However, because 
the proposed rule would prohibit billing parties from issuing a 
demurrage or detention invoice to a person other than the person for 
whose account the billing party provided ocean transportation or space 
to store goods, the billed party is already privy to the confidential 
contract or negotiated terms, including the specific agreed upon rate.
---------------------------------------------------------------------------

    \122\ Doc. No. 61 at 5.
---------------------------------------------------------------------------

4. Dispute Information
    Under the proposed rule, the invoice must contain sufficient 
information to enable the billed party to readily identify a contact to 
whom they may direct questions or concerns related to the invoice and 
understand the process to request fee mitigation, refund, or waiver. 
The proposed rule would require the invoice to include: an email, 
telephone number, or other appropriate contact information for 
questions or request for fee mitigation, refund, or waiver; an URL 
address of a publicly-accessible portion of the billing party's website 
that provides a detailed

[[Page 62352]]

description of information or documentation that the billed party must 
provide to successfully request fee mitigation, refund, or waiver; and 
defined timeframes that comply with the billing practices in this part, 
during which the billed party must request fee mitigation, refunds, or 
waivers and within which the billing party will resolve such requests. 
OSRA 2022 requires that the invoice include contact information for 
questions or requests for mitigation of fees.\123\ The proposed rule 
would also require that the invoice include the URL address where 
billed parties can obtain a detailed description of the information or 
documentation that must be provided with a request for fee mitigation, 
refunds, or waivers. In addition, the proposed rule would require that 
the invoice provide defined timeframes by which the billed party must 
request fee mitigation, refunds, or waivers, and the timeframe by which 
the billing party would resolve such requests.
---------------------------------------------------------------------------

    \123\ 46 U.S.C. 41104(d)(2)(K).
---------------------------------------------------------------------------

a. Website Address That Describes Information Required for Dispute 
Resolution
    The proposed regulation would require the invoice to provide the 
URL address of a publicly-accessible portion of the billing party's 
website that describes the information that the billed party must 
provide to successfully request fee mitigation, refund, or waiver. 
Commenters indicated that shippers lack awareness regarding what 
information they should include when they request fee mitigation, 
refunds, or waivers.\124\ Knowing what information or documentation 
must be filed with requests for fee mitigation, refunds, and waivers, 
will improve efficiency within the dispute process. Parties will not 
need to exchange communications that inform billed parties what 
information to include with their requests, notify billed parties that 
they did not file all the required information, or supplement pending 
requests with additional information. In addition, awareness of what 
information must be provided with any request for fee mitigation, 
refund, or waiver, will enable billed parties to collect the necessary 
information and decrease the number of requests denied on 
technicalities.
---------------------------------------------------------------------------

    \124\ See e.g., Doc. No. 8 at 3; Doc. No. 13 at 7; Doc. No. 41 
at 4; Doc. No. 43 at 5; Doc. No. 53 at 5; Doc. No. 65 at 5; Doc. No. 
61 at 10; Doc. No. 63 at 4; Doc. No. 64 at 7; Doc. No. 67 at 6.
---------------------------------------------------------------------------

    The Commission acknowledges that a billing party should require the 
same information to be submitted with requests for fee mitigation, 
refund, or waiver, regardless of which billed party is making the 
request. Thus, it is not necessary to include a detailed description of 
information or documents that the billed party must provide to 
successfully request a fee mitigation, refund, or waiver on each 
individual demurrage or detention invoice. However, it is important 
that billed parties can easily locate this information. To ensure that 
billed parties are able to find this vital information, the proposed 
rule would require the invoice to include the URL address for a 
publicly-accessible portion of the billing party's website that 
describes the required information. The Commission encourages billing 
parties to provide a URL address that is specific (i.e., providing the 
billing party's homepage when there is no clear indication where this 
information can be found would be insufficient).
b. Defined Timeframes
    The proposed rule would also require the invoice to include 
specific timeframes within which the billed party must submit a fee 
mitigation, refund, or waiver request and for when the billing party 
will resolve such requests. This proposed rule would require the 
timeframes to comply with the proposed billing practices in Sec. Sec.  
541.7 and 541.8. As a result, demurrage or detention invoices would 
notify the billed party of these key timeframes and required billing 
practices and the billed party would not need to be familiar with the 
Commission's regulations to know these key dates.
5. Certifications
    Under the proposed rule, the invoice must contain a statement from 
the billing party that the demurrage or detention charge is consistent 
with any of the Commission's rules related to demurrage and detention, 
including the proposed rule and 46 CFR 545.5.\125\ In addition, the 
proposed rule would require the invoice to include a statement from the 
billing party that their performance did not cause or contribute to the 
underlying invoiced charges. OSRA 2022 requires billing parties to 
include both statements on demurrage and detention invoices.\126\ The 
proposed rule would incorporate these required statements. In addition, 
the proposed rule clarifies that the Commission's rules related to 
demurrage and detention include the proposed rule and the interpretive 
rule on demurrage and detention at 46 CFR 545.5. Although the ANPRM did 
not request comments on whether billing parties include such statements 
on demurrage and detention invoices, several commenters supported 
requiring such statements or similar statements.\127\
---------------------------------------------------------------------------

    \125\ 46 U.S.C. 41104(d)(2)(L).
    \126\ 46 U.S.C. 41104(d)(2)(M).
    \127\ See e.g., Doc. No. 75 at 3; Doc. No. 43 at 5; Doc. No. 77 
at 5; Doc. No. 69 at 5; Doc. No. 84 at 4.
---------------------------------------------------------------------------

C. Billing Practices

1. 30-Day Timeframe To Issue Demurrage or Detention Invoices
    In the ANPRM, the Commission noted concerns from stakeholders 
regarding the lack of clearly defined timeframes for the issuance of 
demurrage or detention invoices.\128\ In Docket No. 19-05, several 
commenters asserted that billing parties should issue demurrage or 
detention invoices within specific timeframes.\129\ When issuing the 
Interpretive Rule in May 2020, the Commission determined not to take 
action regarding deadlines for demurrage or detention invoices but 
stated that it reserved the right to address the issue at a later 
date.\130\
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    \128\ 87 FR at 8508.
    \129\ 85 FR at 29662.
    \130\ 85 FR at 29662.
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    In the ANPRM, the Commission stated that it continued to receive 
reports of delays in receiving demurrage or detention invoices and the 
difficulties in validating the accuracy of the charges contained in 
invoices received months after the occurrence of the charges.\131\ The 
Commission requested comments on whether it should require billing 
parties issue demurrage or detention invoices within 60 days of the 
occurrence of the charge, noting that this approach would align with 
the UIIA.\132\ Specifically, the Commission stated that it was 
interested in whether the UIIA timeframe is effective and whether a 
longer or shorter deadline would be appropriate.\133\
---------------------------------------------------------------------------

    \131\ 87 FR at 8508.
    \132\ 87 FR at 8508.
    \133\ 87 FR at 8508.
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    Many commenters responded to the question of whether the Commission 
should require that billing parties issue demurrage or detention 
invoices within 60 days of when the charge stops accruing. Four 
commenters opposed requiring billing parties issue a demurrage or 
detention invoice within a specified timeframe.\134\ Two commenters, 
WSC and OCEMA, asserted that the Commission should

[[Page 62353]]

not regulate when billing parties issue demurrage or detention invoices 
because these timeframes should be set by contractual terms or 
commercial negotiations.\135\ If, however, the Commission decides to 
require billing parties to issue demurrage or detention invoices within 
a specific timeframe, WSC and OCEMA stated the timeframe should be no 
shorter than 60 days.\136\ In addition, both WSC and OCEMA noted that 
any such timeframe for issuing demurrage or detention invoices should 
allow for nuanced application of the deadline.\137\ For example, both 
parties raised questions regarding how the deadline would apply to 
third-parties that pass through demurrage and detention charges.\138\
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    \134\ Doc. No. 61 at 9-10; Doc. No. 26 at 7; Doc. No. 68 at 1 
(incorporates NAWE Comments); Doc. No. 78 at 6-7. WSC and OCEMA are 
associations that represent ocean common carriers. See Doc. No. 78 
at 1. NAWE and PONYNJSSA are associations that represent marine 
terminal operators. Doc. No. 26 at 1; Doc. No. 68 at 1.
    \135\ Doc. No. 61 at 9-10; Doc. No. 78 at 6-7.
    \136\ Doc. No. 61 at 10; Doc. No. 78 at 7.
    \137\ Doc. No. 61 at 10; Doc. No. 78 at 7.
    \138\ Doc. No. 61 at 10; Doc. No. 78 at 7.
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    NAWE asserted that it is unnecessary for the Commission to regulate 
timeframes for billing parties, especially MTOs, to issue demurrage or 
detention invoices.\139\ Specifically, NAWE observed that most MTOs use 
electronic data interchanges and electronic payment methods and are 
able to ``invoice'' demurrage or detention charges immediately after 
these charges stop accruing.\140\ Because there are no delays for such 
MTOs in issuing demurrage or detention invoices, NAWE commented that 
there is no need for such regulations with regard to MTOs.\141\
---------------------------------------------------------------------------

    \139\ Doc. No. 26 at 7.
    \140\ Doc. No. 26 at 7.
    \141\ Doc. No. 26 at 7.
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    The remaining commenters supported mandating a deadline within 
which a billing party must issue a demurrage or detention invoice. 
These include comments submitted by a customs broker; 10 motor carriers 
and motor carrier organizations; \142\ 14 OTI and OTI organizations; 
\143\ 31 BCOs and BCO trade organizations; \144\ and five with unknown 
affiliations.\145\
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    \142\ See Doc. No. 51; Doc. No. 56; Doc. No. 46; Doc. No. 56; 
Doc. No. 7; Doc. No. 15; Doc. No. 24; Doc. No. 33; Doc. No. 47; Doc. 
No. 17.
    \143\ See Doc. No. 13; Doc. No. 75; Doc. No. 70; Doc. No. 82; 
Doc. No. 69; Doc. No. 83; Doc. No. 60; Doc. No. 62; Doc. No. 19; 
Doc. No. 77; Doc. No. 48; Doc. No. 76; Doc. No. 63, Doc. No. 81.
    \144\ See Doc. No. 79; Doc. No. 3; Doc. No. 67; Doc. No. 6; Doc. 
No. 14; Doc. No. 8; Doc. No. 30; Doc. No. 38; Doc. No. 34; Doc. No. 
22; Doc. No. 40; Doc. No. 42; Doc. No. 66; Doc. No. 37; Doc. No. 72; 
Doc. No. 71; Doc. No. 44; Doc. No. 21; Doc. No. 28; Doc. No. 41; 
Doc. No. 43; Doc. No. 64; Doc. No. 33; Doc. No. 53; Doc. No. 54; 
Doc. No. 65; Doc. No. 55; Doc. No. 58; Doc. No. 73; Doc. No. 35; 
Doc. No. 84.
    \145\ See Doc. No. 9; Doc. No. 18; Doc. No. 27; Doc.; Doc. No. 
32.
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    These commenters cited several reasons in support of an invoice 
deadline. For example, several commenters asserted that having a 
deadline will provide billed parties with predictability and 
transparency regarding when they will receive their invoices.\146\ In 
the ANPRM, the Commission requested information on how long it 
typically takes to receive a demurrage or detention invoice.\147\ 
Responses to this question vary greatly. For example, some commenters 
stated that billed parties receive demurrage or detention invoices 
within several days after the charges stop accruing.\148\ Other 
commenters claimed that it may take between 2-4 weeks to receive 
demurrage or detention invoices.\149\ Most commenters however, stated 
that the time varies greatly and could range from 30 days to 24 
months.\150\ For example, the Meadows Group reported that it received 
demurrage and detention invoices an average of 120 days after the 
charge accrued, but that it also received invoices 24 months after the 
fact.\151\ In addition, National Association of Manufacturers (NAM) 
stated that its members report a wide range of invoice delivery times, 
from as short as 30 days to as long as nearly 24 months.\152\ In 
addition, commenters noted that the time it takes for a billing party 
to issue a demurrage or detention invoice varies on the charges 
assessed. For example, one commenter stated that billing parties 
invoice import demurrage before releasing containers, but that billing 
parties may take as long as 30 days to invoice export demurrage charges 
and 60 days to invoice import and export detention charges.\153\
---------------------------------------------------------------------------

    \146\ Doc. No. 67 at 5; Doc. No. 24 at 4; Doc. No. 83 at 3; Doc. 
No. 62 at 5; Doc. No. 8 at 2-3.
    \147\ 87 FR at 8509.
    \148\ Doc. No. 19 at 3; Doc. No. 37 at 3; Doc. No. 26 at 4; Doc. 
No. 49 at 5.
    \149\ Doc. No. 18 at 3; Doc. No. 25 at 2; Doc. No. 32 at 3; Doc. 
No. 44 at 4; Doc No. 14 at 3.
    \150\ Doc. No. 17 at 3 (3-6 months); Doc. No. 22 at 3 (120-day 
average, but have received invoices 24 months after); Doc. No. 33 at 
9 (average is 30-60 days, but sometimes up to six months); Doc. No. 
28 at 3 (average of 30-60 days but sometimes up to six months); Doc. 
No. 48 at 6 (members received invoices 180 days after a transaction 
took place); Doc. No. 54 at 4 (takes up to 6 months to receive an 
invoice); Doc. No. 55 at 2 (up to 24 months); Doc. No. 53 at 5 
(averages 60-90 days, but as long as 8 months); Doc. No. 67 at 2, 5 
(typically receive billings within 30 days, but sometimes 60 days or 
more); Doc. No. 3 at 3 (averaging 6-12 months). See Doc. No. 27 at 
3; Doc. No. 46 at 2; Doc. No. 41 at 4.
    \151\ Doc. No. 22 at 3
    \152\ Doc. No. 55 at 2.
    \153\ Doc. No. 9 at 3; see Doc. No. 39 at 2; Doc. No. 56 at 2; 
Doc. No. 67 at 3; Doc. No. 60 at 8; Doc. No. 65 at 5; Doc. No. 64 at 
6.
---------------------------------------------------------------------------

    In addition to providing transparency and predictability for when 
billing parties must issue demurrage or detention invoices, commenters 
noted that an invoicing deadline will ensure that billed parties will 
have the information readily available to verify the accuracy of the 
charges.\154\ Similarly, many commenters claimed that timely billing 
will reduce costly and time-consuming research to verify charges, 
particularly when received months after the fact.\155\ NAM explains 
that shippers and BCOs regularly receive costly bills months after the 
fact and that responding to such bills require diverting staff hours 
and attention away from cargo delivery and efficient logistics 
operations.\156\ Furthermore, NAM asserted that instituting an invoice 
deadline will ``ensure that shippers and BCOs will be able to 
accurately maintain shipping information and records to validate any 
demurrage or detention bills[.]'' \157\
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    \154\ Doc. No. 67 at 5; Doc. No. 58 at 3; Doc. No. 22 at 3; Doc. 
No. 84 at 4-5; Doc. No. 28 at 3.
    \155\ Doc. No. 13 at 7; Doc. No. 3 at 2; Doc. No. 54 at 5; Doc. 
No. 58 at 3; Doc. No. 55 at 2; Doc. No. 53 at 5; Doc. No. 65 at 4; 
Doc. No. 79 at 4.
    \156\ Doc. No. 55 at 2.
    \157\ Doc. No. 55 at 2.
---------------------------------------------------------------------------

    Most commenters agreed that billing parties should issue demurrage 
or detention invoices within a specific timeframe but disagreed on what 
that timeframe should be. Three commenters did not indicate a specific 
deadline in their comments but stressed the need for a timeliness 
standard.\158\ Among the remaining commenters, 23 commenters supported 
a 60-day timeframe; \159\ 25 commenters supported a 30-day timeframe; 
\160\ and 11 commenters favored shorter timeframes ranging from five to 
twenty-one days.\161\
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    \158\ Doc. No. 51 at 2; Doc. No. 34 at 2; Doc. No. 35 at 2.
    \159\ Doc. No. 76 at 7; Doc. No. 65 at 5; Doc. No. 54 at 4; Doc. 
No. 39 at 2; Doc. No. 46 at 2; Doc. No. 32 at 2; Doc. No. 33 at 9; 
Doc. No. 9 at 3; Doc. No. 24 at 4; Doc. No. 81 at 4; Doc. No. 44 at 
4; Doc. No. 58 at 3; Doc. No. 55 at 2; Doc. No. 43 at 5; Doc. No. 56 
at 2; Doc. No. 53 at 5; Doc. No. 22 at 3; Doc. No. 37 at 3; Doc. No. 
48 at 6; Doc. No. 28 at 3; Doc. No. 63 at 4; Doc. No. 8 at 3; Doc. 
No. 17 at 4.
    \160\ Doc. No. 3 at 2-3; Doc. No. 6 at 2; Doc. No. 7 at 4; Doc. 
No. 13 at 7; Doc. No. 14 at 4; Doc. No. 15 at 3; Doc. No. 29 at 3; 
Doc. No. 30 at 2; Doc. No. 40 at 3; Doc. No. 42 at 1 (citing Doc. 
No. 29); Doc. No. 47 at 3; Doc. No. 67 at 3; Doc. No. 66 at 1 
(citing Doc. No. 29); Doc. No. 83 at 5; Doc. No. 60 at 8; Doc. No. 
62 at 5; Doc. No. 64 at 6; Doc. No. 67 at 4-5; Doc. No. 72 at 7; 
Doc. No. 71 at 1 (citing Doc. No. 29); Doc. No. 75 at 3, 4; Doc. No. 
70 at 5; Doc. No. 84 at 5; Doc. No. 82 at 2. Many of these 
commenters supported shorter timeframes as well. See Doc. No. 70 
(supported 7 days); Doc. No. 60 at 8 (supported 5-15 days); Doc. No. 
72 at 7 (supported 5-15 days); Doc. No. 64 at 6 (supported 14 days); 
Doc. No. 75 at 4 (supported 15 days); Doc. No. 82 at 2 (supported 21 
days).
    \161\ Doc. No. 27 at 3 (5-10 days); Doc. No. 38 at 4 (10 days); 
Doc. No. 73 at 3-4 (10 days); Doc. No. 41 at 4 (10 days); Doc. No. 
18 at 3 (10 days); Doc. No. 79 at 4 (10-14 days); Doc. No. 56 at 2-3 
(14 days); Doc. No. 69 at 5, 7 (14 days); Doc. No. 77 at 7 (14-21 
days); Doc. No. 21 at 3-4 (15 days); Doc. No. 19 at 3 (21 days).

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[[Page 62354]]

    Two commenters who supported the 60-day timeframe stated that this 
timeframe is reasonable and aligns with the UIIA timeframe.\162\ For 
example, Intermodal Association of North America (IANA) asserted that 
the 60-day timeframe provided in the UIIA represents an industry 
standard because this requirement has been in effect for over 25 
years.\163\ Additionally, IANA opined that adopting the 60-day 
timeframe ``will reinforce, rather than disrupt, long-standing industry 
practices.'' \164\ However, many commenters who supported the 60-day 
timeframe also urged the Commission to consider shorter 
timeframes.\165\
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    \162\ Doc. No. 43 at 5; Doc. No. 24 at 3.
    \163\ Doc. No. 24 at 3.
    \164\ Doc. No. 24 at 4.
    \165\ Doc. No. 65 at 5; Doc. No. 54 at 4; Doc. No. 81 at 4; Doc. 
No. 28 at 3.
---------------------------------------------------------------------------

    Many commenters also supported an invoice deadline shorter than 60 
days for a variety of reasons. For example, commenters asserted that 60 
days is too long and that, with billing parties using automated 
systems, 30 days is more than adequate time for billing parties to 
issue demurrage or detention invoices.\166\ Moreover, commenters 
observed that several billing parties currently issue invoices within 
30 days after the charges stop accruing.\167\ In addition, OTI 
commenters stated that receiving demurrage and detention invoices from 
VOCCs and MTOs in a timely manner will allow OTIs to bill their clients 
within a reasonable timeframe which will hopefully facilitate 
collection of these charges.\168\
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    \166\ Doc. No. 29 at 2; Doc. No. 30 at 2; Doc. No. 38 at 4; Doc. 
No. 67 at 3; Doc. No. 73 at 4; Doc. No. 40 at 3; Doc. No. 56 at 3. 
See Doc. No. 60 at 8.
    \167\ See Doc. No. 29 at 2-3 (immediate billing is an industry 
standard for the perishable produce industry). See also Doc. No. 67 
at 5; Doc. No. 30 at 2; Doc. No. 40 at 3; Doc. No. 38 at 4. 
Commenters report that they receive demurrage or detention invoices 
several days to one month after charges stop accruing. Doc. No. 19 
at 3; Doc. No. 37 at 3; Doc. No. 26 at 4; Doc. No. 49 at 5; Doc. No. 
18 at 3; Doc. No. 25 at 2; Doc. No. 32 at 3; Doc. No. 44 at 4; Doc. 
No. 14 at 3.
    \168\ Doc. No. 32 at 3; Doc. No. 69 at 5; Doc. No. 70 at 3, 5; 
Doc. No. 76 at 7; Doc. No. 77 at 5.
---------------------------------------------------------------------------

    The Commission is proposing to require billing parties to issue 
demurrage or detention invoices to billed parties within 30 days from 
the date charges stop accruing. Although the proposed 30-day timeframe 
is shorter than the 60-day timeframe contained in the UIIA, commenters 
reported that demurrage or detention invoices generally arrive within 
the 30-day timeframe.\169\ For example, MTOs indicated that, because of 
customer portals and electronic payment systems, invoices are available 
immediately when the charges stop accruing.\170\ Because it appears 
that billing parties are capable of issuing demurrage or detention 
invoices, on average, within 30 days, applying this timeframe does not 
appear to be unreasonable. In addition, a 30-day deadline, which 
provides billing parties sufficient time to prepare an invoice, will 
also permit billed parties to verify the charges more efficiently. As 
commenters noted, the more time that passes between when the charges 
stop accruing and when the billed party receives an invoice, it is more 
difficult for the billed party to verify the charge because it is less 
likely that they have the necessary information or documentation to 
confirm a charge.
---------------------------------------------------------------------------

    \169\ Doc. No. 29 at 2-3; Doc. No. 67 at 5; Doc. No. 30 at 2; 
Doc. No. 40 at 3; Doc. No. 38 at 4; Doc. No. 19 at 3; Doc. No. 37 at 
3; Doc. No. 26 at 4; Doc. No. 49 at 5; Doc. No. 18 at 3; Doc. No. 25 
at 2; Doc. No. 32 at 3; Doc. No. 44 at 4; Doc. No. 14 at 3.
    \170\ Doc. No. 26 at 7; Doc. No. 49 at 4.
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    The Commission also proposes to excuse billed parties from paying 
assessed charges contained in invoices issued after the 30-day 
timeframe. If a billing party does not issue a demurrage or detention 
invoice within the required timeframe, then the charge would be void 
and the billed party would not be required to pay. Without such a 
provision, there would be no consequence for not meeting the 30-day 
timeframe. In addition, this proposed rule is consistent with the UIIA 
and supported by commenters.\171\
---------------------------------------------------------------------------

    \171\ UIIA at E.6.c; Doc. No. 84 at 5; Doc. No. 77 at 7; Doc. 
No. 69 at 5, 7; Doc. 75 at 4; Doc. No. 43 at 5.
---------------------------------------------------------------------------

    The 30-day timeframe would apply to VOCCs, MTOs, and NVOCCs. In the 
ANPRM, the Commission requested comments on whether the Commission 
should require different timeframes for VOCC and NVOCC demurrage and 
detention invoices.\172\ Most commenters responded that the same 
timelines should apply to VOCCs and NVOCCs.\173\ However, when NVOCCs 
pass through demurrage or detention charges assessed against them to 
their customers, it may be difficult for NVOCCs to issue a demurrage or 
detention invoice within the required timeframe if it does not receive 
the initial invoice in a timely manner.\174\ In addition, OCEMA 
suggested that the invoice deadlines should ``allow nuance in the 
application of the deadline for factors that may justify delay[.]'' 
\175\ The Commission requests comments discussing how it can best 
reflect the application of the deadline to NVOCCs that pass through 
demurrage or detention charges.
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    \172\ 87 FR at 8509.
    \173\ Doc. No. 3 at 2; Doc. No. 41 at 3; Doc. No. 64 at 5; Doc. 
No. 28 at 2; Doc. No. 43 at 4; Doc. No. 53 at 4; Doc. No. 51 at 2; 
Doc. No. 80 at 1; Doc. No. 61 at 8; Doc. No. 15 at 2; Doc. No. 22 at 
3; Doc. No. 46 at 2.
    \174\ See Doc. No. 32 at 3; Doc. No. 69 at 5; Doc. No. 70 at 3, 
5; Doc. No. 76 at 7; Doc. No. 77 at 5.
    \175\ Doc. No. 78 at 7. See Doc. No. 13 at 4; Doc. No. 61 at 10.
---------------------------------------------------------------------------

2. Timeframes for Disputing Charges and Resolving Disputes
    The Commission proposes that billed parties submit any requests for 
fee mitigation, refund, or waiver to billing parties within 30 days of 
receiving a demurrage or detention invoice.\176\ The proposed rule 
would provide billed parties 30 days to verify the invoiced charges; 
decide whether they would like to request fee mitigation, refund, or 
waiver; and collect the documentation to support its request. The 
proposed timeframe protects billed parties against unreasonable 
deadlines that billing parties may impose upon their customers. At the 
same time, the 30-day dispute timeframe would notify billed parties 
that, if they plan to request fee mitigation, refund, or waiver, they 
have a limited amount of time within which they must submit such a 
request and it would protect billing parties from untimely requests.
---------------------------------------------------------------------------

    \176\ The proposed 30-day deadline would apply to requests for 
fee mitigation, refunds, or waivers submitted by the billed party to 
the billing party through the billing parties' dispute process. The 
proposed rule does not apply to ``charge complaints'' authorized by 
section 10 of OSRA 2022 (codified in 46 U.S.C. 41310).
---------------------------------------------------------------------------

    The 30-day timeframe for disputing charges is consistent with the 
timeframe for billed parties to dispute charges in the UIIA and is 
supported by commenters.\177\ One commenter suggested extending the 
current dispute deadline from 30 to 60 days to allow carriers more time 
to audit and pay per diem invoices accordingly.\178\ The Commission is 
proposing this timeframe in conjunction with its proposed 30-day 
timeframe for billing parties to issue demurrage or detention invoices. 
Because the proposed rules would require billing parties to issue 
invoices in a timelier manner, one anticipated benefit is that billed 
parties would be able to more quickly verify the charges as the 
documents necessary to confirm the charges would be more readily 
available. Accordingly, in the Commission's view, the 30-day timeframe 
is a reasonable one that permits billed parties to review the charges 
and request fee mitigation, refund, or waiver as necessary that they 
can meet readily.
---------------------------------------------------------------------------

    \177\ UIIA at E.6.f; Doc. No. 84 at 4; Doc. No. 64 at 7; Doc. 
No. 43 at 5.
    \178\ Doc. No. 59 at 2.

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[[Page 62355]]

    The Commission proposes that, after receiving a fee mitigation, 
refund, or waiver request, a billing party must resolve the request 
within 30 days. This proposed deadline is consistent with the response 
deadline contained in the UIIA and supported by several 
commenters.\179\ The proposed rule would require a billing party, after 
receiving a request to mitigate, refund, or waive a charge on a 
demurrage or detention invoice, to determine whether to grant or deny 
the request within 30 days of receiving the request. Resolution of a 
request also includes billing parties to mitigate, refund, or waive a 
charge, if appropriate, within the 30-day timeframe. If the billing 
party does not resolve the fee mitigation, refund, or waiver request 
within 30 days, then the charge at issue must be mitigated, refunded, 
or waived.
---------------------------------------------------------------------------

    \179\ UIIA at H.1; Doc. No. 63 at 4; Doc. No. 43 at 5; Doc. No. 
64 at 7; Doc. No. 41 at 4; Doc. No. 54 at 5; Doc. No. 33 at 11; Doc. 
No. 74 at 5. See Doc. No. 25, Attachment at 1 (states that the 
company aspires to address disputes within 30 days). Several 
commenters supported shorter timeframes; however, it appears that 
these commenters were discussing timeframes for when billing parties 
should issue refunds after they dismiss the charges at issue. See 
Doc. No. 39 at 3; Doc. No. 69 at 8; Doc. No. 46 at 3; Doc. No. 84 at 
5; Doc. No. 75 at 5; Doc. No. 79 at 4; Doc. No. 3 at 3; Doc. No. 72 
at 8; Doc. No. 60 at 9; Doc. No. 28 at 3; Doc. No. 21 at 4.
---------------------------------------------------------------------------

    The proposed deadline would provide billed parties with certainty 
that it will receive a response to its fee mitigation, refund, or 
waiver request within a specific timeframe. Like receiving demurrage or 
detention invoices, commenters reported that the time it takes for 
billed parties to receive a refund varies greatly. For example, one 
commenter claimed that ``[r]efunds are paid when the carrier or 
terminal operator wants to do it'' and that it can take up to six 
months to receive a refund.\180\ Commenters generally supported having 
a deadline for resolving requests for fee mitigation, refund, or 
waiver. As one commenter succinctly stated, ``just as bills must be 
paid within a certain amount of time, it seems only fair that refunds 
should be issued within a set time frame.'' \181\ In that vein, 
proposing to require billing parties to resolve requests for fee 
mitigation, refunds, or waivers within 30 days of receipt ensures that 
such requests are not pending for an indefinite period of time.
---------------------------------------------------------------------------

    \180\ Doc. No. 77 at 8. See Doc. No. 33 at 11; see also Doc. No. 
22 at 4 (typically takes six months to receive a refund, may take as 
long as two years).
    \181\ Doc. No. 51 at 4. See Doc. No. 44 at 4 (``[r]efunds should 
be issued in a timely manner, certainly within a specified number of 
days'').
---------------------------------------------------------------------------

V. Public Participation

How do I prepare and submit comments?

    You may submit comments by using the Federal eRulemaking Portal at 
www.regulations.gov, under Docket No. 2022-0066, Demurrage and 
Detention Billing Requirements. Please follow the instructions provided 
on the Federal eRulemaking Portal to submit comments.

How do I submit confidential business information?

    The Commission will provide confidential treatment for identified 
confidential information to the extent allowed by law. If you would 
like to request confidential treatment, pursuant to 46 CFR 502.5, you 
must submit the following, by email, to [email protected]:
     A transmittal letter that identifies the specific 
information in the comments for which protection is sought and 
demonstrates that the information is a trade secret or other 
confidential research, development, or commercial information.
     A confidential copy of your comments, consisting of the 
complete filing with a cover page marked ``Confidential-Restricted,'' 
and the confidential material clearly marked on each page.
     A public version of your comments with the confidential 
information excluded. The public version must state ``Public Version--
confidential materials excluded'' on the cover page and on each 
affected page and must clearly indicate any information withheld.

Will the Commission consider late comments?

    The Commission will consider all comments received before the close 
of business on the comment closing date indicated above under DATES. To 
the extent possible, we will also consider comments received after that 
date.
    How can I read comments submitted by other people?
    You may read the comments received by the Commission at 
www.regulations.gov, under Docket No. 2022-0066, Demurrage and 
Detention Billing Requirements.

VI. Rulemaking Analyses

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, provides that 
whenever an agency is required to publish a notice of proposed 
rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 553, 
the agency must prepare and make available for public comment an 
initial regulatory flexibility analysis (IRFA) describing the impact of 
the proposed rule on small entities, unless the head of the agency 
certifies that the rulemaking will not have a significant economic 
impact on a substantial number of small entities. 5 U.S.C. 603, 605.
    The proposed rule would require VOCCs, NVOCCs, and MTOs to 
including minimum billing information on detention and demurrage 
invoices. The rulemaking additionally requires billing parties that 
issue demurrage and detention invoices to follow certain billing 
practices; specifically, billed parties must issue demurrage and 
detention invoices within 30 days from when charges stop accruing.
    The Commission presumes that VOCCs and MTOs generally do not 
qualify as small entities under the guidelines of the Small Business 
Administration (SBA).\182\ The Commission previously stated that VOCCs 
and MTOs generally are large companies that exceed the employee (500) 
and/or annual revenue ($21.5 million) thresholds to be considered small 
business entities. However, the Commission presumes that NVOCCs are 
small business entities.
---------------------------------------------------------------------------

    \182\ FMC Policy and Procedures regarding Proper Consideration 
of Small Entities in Rulemakings (Feb. 7, 2003), available at: 
https://www.fmc.gov/wp-content/uploads/2018/10/SBREFA_Guidelines_2003.pdf.
---------------------------------------------------------------------------

    There are likely two types of costs imposed by the proposed 
rulemaking on the affected businesses. The imposition of a 30-day 
deadline to issue an invoice from when demurrage and detention charges 
stop accruing could result in a loss of revenue to the billing party. 
In additional, the minimum billing information requirements imposed by 
the proposed rule may require the billing party to collect additional 
information and change its billing information technology system to 
include all the required information on invoices.
    Most of the costs of the rulemaking will be borne by VOCCs and MTOs 
as they generally assess demurrage and detention charges, and not 
NVOCCs. As discussed above, in most cases, NVOCCs pass through 
detention and demurrage charges billed to them on invoices generated by 
VOCCs or MTOs. Accordingly, NVOCCs should receive the minimum billing 
information required by the proposed rule from either the VOCC or MTO 
issuing the invoice. For these reasons, the Chairman of the Federal 
Maritime Commission certifies that if this rule is promulgated, it 
would not have a significant

[[Page 62356]]

economic impact on a substantial number of small entities.

National Environmental Policy Act

    The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 
4321-4347) requires Federal agencies to consider the environmental 
impacts of proposed major Federal actions significantly affecting the 
quality of the human environment, as well as the impacts of 
alternatives to the proposed action. When a Federal agency prepares an 
environmental assessment, the Council on Environmental Quality (CEQ) 
NEPA implementing regulations (40 CFR parts 1500 through 1508) require 
the Federal agency to ``include brief discussions of the need for the 
proposal, of alternatives [. . .], of the environmental impacts of the 
proposed action and alternatives, and a listing of agencies and persons 
consulted.'' 40 CFR 1508.9(b). This section serves as the Commission's 
Draft Environmental Assessment (Draft EA) for the proposed changes to 
46 CFR part 541.
    Upon completion of an environmental assessment, it was determined 
that the proposed rule will not constitute a major Federal action 
significantly affecting the quality of the human environment within the 
meaning of the National Environmental Policy Act of 1969, 42 U.S.C. 
4321 et seq., and that preparation of an environmental impact statement 
is not required. This Finding of No Significant Impact (``FONSI'') will 
become final within 10 days of publication of this notice in the 
Federal Register unless a petition for review is filed by any of the 
methods described in the ADDRESSES section of the document. The FONSI 
and environmental assessment are available for inspection on the docket 
at https://www.regulations.gov.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
requires an agency to seek and receive approval from the Office of 
Management and Budget (OMB) before collecting information from the 
public. The agency must submit collections of information in proposed 
rules to OMB in conjunction with the publication of the notice of 
proposed rulemaking. In compliance with the PRA, the Commission has 
submitted the proposed information collection to the Office of 
Management and Budget and is requesting comment on the proposed 
revision.
    With the proposed addition of 46 CFR part 541, the Commission has 
identified specific billing information required on demurrage and 
detention invoices. Although some entities issue demurrage and 
detention invoices that contain most of the required information, many 
entities will likely need to revise their practices to include the 
required information. The Commission believes that the addition of 46 
CFR part 541 will likely increase the overall industry burden, but that 
it will not have a significant impact on members of the shipping 
public.
Title: 46 CFR Part 541--Demurrage and Detention Billing Requirements
    OMB Control Number: 3072-XXXX.
    Abstract: 46 U.S.C. 41104(a)(15) and (d)(2) and 46 CFR part 541 
subpart A, if adopted, require demurrage and detention invoices to 
contain certain additional information to increase transparency so that 
billed parties can identify the containers at issue, the applicable 
rate, dates for which charges accrued, and how to dispute charges. 
Further, 46 U.S.C. 41104(d)(2) and 46 CFR part 541, if adopted, also 
require demurrage and detention invoices to certify that the charges 
comply with applicable regulatory provisions and that the invoicing 
party's behavior did not contribute to the charges.
    Current Action: The proposed rule implements statutory text that 
identifies the minimum information that billing parties must include on 
demurrage and detention invoices, identifies additional information 
that billing parties must include on demurrage and detention invoices, 
and clarifies which entities may receive demurrage and detention 
invoices.
    Type of Request: Approve information collection.
    Needs and Uses: The Commission identifies information that entities 
must include on demurrage and detention invoices to ensure compliance 
with the Shipping Act of 1984, as amended. Specifically, proposed 46 
CFR part 541 subpart A implements the billing information requirements 
contained in 46 U.S.C. 41104(d)(2) and adds additional minimum 
information that billing parties must include on demurrage and 
detention invoices.
    Frequency: The frequency of demurrage and detention invoices is 
determined by the billing party. It is the billing entity's 
responsibility to ensure that their demurrage and detention charges 
comply with applicable statutory and regulatory provisions. The 
Commission estimates that between five and ten percent of all 
containers moving in U.S.-foreign trade will receive a demurrage and/or 
detention invoice or an estimated range of 1,135,000 and 2,270,000 
invoices annually.
    Type of Respondents: VOCCs, MTOs, and NVOCCs are required to 
include specific information on their demurrage and detention invoices 
sent to billed parties.
    Number of Annual Respondents: The Commission anticipates an annual 
respondent universe of 354 VOCCs and MTOs. The Commission did not 
include NVOCCs in its annual respondent universe because in most, if 
not all cases, NVOCCs pass through the demurrage and detention charges 
it receives to their customers. Because NVOCCs are passing through the 
charges they are not collecting the required minimum information 
themselves.
    Estimated Time per Response: The Commission estimates a one-time 
burden of an estimated 25 hours per respondent to integrate the 
required billing information elements into their existing invoicing 
system. After this initial burden, the Commission anticipates that the 
estimated time to create and retain each demurrage or detention invoice 
to be six minutes or 0.1 hours.
    Total Annual Burden: The Commission estimates a one-time burden for 
respondents to integrate the additional billing information elements, 
required by OSRA 2022 and by the proposed rule, into their existing 
invoicing system to be 8,850 person-hours and $882,522. After this 
initial integration, the Commission estimates the total annual burden 
to provide demurrage and detention invoices and to ensure accuracy to 
be 113,500-227,000 person-hours and $6,339,020-$12,678,040.
    Comments are invited on:
     Whether the collection of information is necessary for the 
proper performance of the functions of the Commission, including 
whether the information will have practical utility;
     Whether the Commission's estimate for the burden of the 
information collection is accurate;
     Ways to enhance the quality, utility, and clarity of the 
information to be collected;
     Ways to minimize the burden of the collection of 
information on respondents, including the use of automated collection 
techniques or other forms of information technology.
    Please submit any comments, identified by the docket number in the 
heading of this document, by the methods described in the ADDRESSES 
section of this document.

[[Page 62357]]

Executive Order 12988 (Civil Justice Reform)

    This proposed rule meets the applicable standards in E.O. 12988 
titled, ``Civil Justice Reform,'' to minimize litigation, eliminate 
ambiguity, and reduce burden.

Regulation Identifier Number

    The Commission assigns a regulation identifier number (RIN) to each 
regulatory action listed in the Unified Agenda of Federal Regulatory 
and Deregulatory Actions (Unified Agenda). The Regulatory Information 
Service Center publishes the Unified Agenda in April and October of 
each year. You may use the RIN contained in the heading at the 
beginning of this document to find this action in the Unified Agenda, 
available at https://www.reginfo.gov/public/do/eAgendaMain.

List of Subjects in 46 CFR Part 541

    Demurrage and detention; Common carriers; Exports; Imports; Marine 
terminal operators.


0
For the reasons set forth in the preamble, the Federal Maritime 
Commission proposes to add 46 CFR part 541 as follows:

PART 541--DEMURRAGE AND DETENTION

Subpart A--Demurrage and Detention Billing Requirements

Sec.
541.1 Purpose
541.2 Scope and applicability
541.3 Definitions
541.4 Properly issued invoices
541.5 Failure to include required information
541.6 Contents of invoice
541.7 Issuance of demurrage and detention invoices
541.8 Requests for fee mitigation, refund, or waiver
541.9-541.98 [Reserved]
541.99 OMB control number assigned pursuant to the Paperwork 
Reduction Act

Subpart B [Reserved]

    Authority:  5 U.S.C. 553; 46 U.S.C. 40307, 40501-40503, 41101-
41106, 40901-40904, and 46105; and 46 CFR 515.23.

Subpart A--Billing Requirements and Practices


Sec.  541.1  Purpose

    This part establishes the minimum information that must be included 
on or with demurrage and detention invoices. It also establishes 
procedures that must be adhered to when invoicing for demurrage or 
detention.


Sec.  541.2  Scope and applicability

    (a) This part sets forth regulations governing any invoice issued 
by an ocean common carrier, marine terminal operator, or non-vessel 
operating common carrier to a billed party or their designated agent 
for the collection of demurrage or detention charges.
    (b) This regulation does not govern the billing relationships among 
and between ocean common carriers and marine terminal operators.


Sec.  541.3  Definitions

    In addition to the definitions set forth in 46 U.S.C. 40102, when 
used in this part:
    Billing dispute means any disagreement with respect to the validity 
of the charges, or the method of invoicing raised by the billed party 
or its agent to the billing party.
    Billed party means the person receiving the demurrage or detention 
invoice and who is responsible for the payment of any incurred 
demurrage or detention charge.
    Billing party means the ocean common carrier, marine terminal 
operator, or non-vessel operating common carrier who issues a demurrage 
or detention invoice.
    Demurrage or detention mean any charges, including ``per diem'' 
charges, assessed by ocean common carriers, marine terminal operators, 
or non-vessel operating common carriers related to the use of marine 
terminal space (e.g., land) or shipping containers, but not including 
freight charges.
    Demurrage or detention invoice means any statement of charges 
printed, written, or accessible online that documents an assessment of 
demurrage or detention charges.


Sec.  541.4  Properly issued invoices

    A properly issued invoice is a demurrage or detention invoice 
issued by a billing party to the person for whose account the billing 
party provided ocean transportation or storage.
    (a) This person must have contracted with the billing party for the 
carriage or storage of goods and is therefore responsible for the 
payment of any incurred demurrage or detention charge.
    (b) A billing party cannot issue an invoice to any other person.


Sec.  541.5  Failure to include required information

    Failure to include any of the required minimum information in this 
part in a demurrage or detention invoice eliminates any obligation of 
the billed party to pay the applicable invoice.


Sec.  541.6  Contents of invoice.

    At a minimum, an invoice for demurrage or detention charges must 
include the following information:
    (a) Identifying information. The invoice must contain sufficient 
information to enable the billed party to identify the container(s) to 
which the charges apply, including:
    (1) The Bill of Lading number(s);
    (2) The container number(s);
    (3) For imports, the port(s) of discharge; and
    (4) The basis for why the invoiced party is the proper party of 
interest and thus liable for the charge.
    (b) Timing information. The invoice must contain sufficient 
information to enable the billed party to identify the relevant time 
for which the charges apply, and the applicable due date for invoiced 
charges, including:
    (1) The billing date;
    (2) The billing due date;
    (3) The allowed free time in days;
    (4) The start date of free time;
    (5) The end date of free time;
    (6) For imports, the container availability date;
    (7) For exports, the earliest return date; and
    (8) The specific date(s) for which demurrage and/or detention were 
charged.
    (c) Rate information. The invoice must contain sufficient 
information to enable the billed party to identify the amount due and 
readily ascertain how that amount was calculated, including:
    (1) The total amount due;
    (2) The applicable detention or demurrage rule (i.e., the tariff 
name and rule number, applicable service contract number and section, 
or applicable negotiated arrangement) on which the daily rate is based; 
and
    (3) The specific rate or rates per the applicable tariff rule or 
service contract.
    (d) Dispute information. The invoice must contain sufficient 
information to enable the billed party to readily identify a contact to 
whom they may direct questions or concerns related to the invoice and 
understand the process to request fee mitigation, refund, or waiver, 
including:
    (1) The email, telephone number, or other appropriate contact 
information for questions or request for fee mitigation, refund, or 
waiver;
    (2) The URL address of a publicly-accessible portion of the billing 
party's website that provides a detailed description of information or 
documentation that the billed party must provide to successfully 
request fee mitigation, refund, or waiver; and

[[Page 62358]]

    (3) Defined timeframes that comply with the billing practices in 
this part, during which the billed party must request a fee mitigation, 
refund, or waiver and within which the billing party will resolve such 
requests.
    (e) Certifications. The invoice must contain statements from the 
billing party that:
    (1) The charges are consistent with any of the Federal Maritime 
Commission's rules related to demurrage and detention, including, but 
not limited to, this part and 46 CFR 545.5; and
    (2) The billing party's performance did not cause or contribute to 
the underlying invoiced charges.


Sec.  541.7  Issuance of demurrage and detention invoices.

    (a) A billing party must issue a demurrage or detention invoice 
within thirty (30) days from the date on which the charge was last 
incurred. If the billing party does not issue demurrage or detention 
invoices within the required timeframe, then the billed party is not 
required to pay the charge.
    (b) If the billing party invoices the incorrect party, the correct 
billed party must receive an invoice within thirty (30) days from the 
date the incorrect party disputes the charges with the billing party. 
An invoice to the correct billed party must be issued within sixty (60) 
days after the charges were last incurred. If the billed party does not 
receive demurrage or detention invoices within the required timeframe, 
then it is not required to pay the charge.


Sec.  541.8  Requests for fee mitigation, refund, or waiver.

    (a) If a billed party requests mitigation, refund, or waiver of 
fees from the billing party, it must submit the request within thirty 
(30) days of receiving the invoice.
    (b) If a billing party receives a fee mitigation, refund, or waiver 
request from a billed party, the billing party must resolve the request 
within thirty (30) days of receiving such a request. If the billing 
party fails to resolve the fee mitigation, refund, or waiver request 
within the 30-day deadline, the billed party is not required to pay the 
charge at issue.


Sec.  541.9-541.98  [Reserved]


Sec.  541.99  OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    The Commission has received Office of Management and Budget 
approval for this collection of information pursuant to the Paperwork 
Reduction Act of 1995, as amended. In accordance with that Act, 
agencies are required to display a currently valid control number. In 
this regard, the valid control number for this collection of 
information is 3072-XXXX.

Subpart B [Reserved]

    By the Commission.
William Cody,
Secretary.
[FR Doc. 2022-22290 Filed 10-13-22; 8:45 am]
BILLING CODE 6730-02-P

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