14330 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

1Federal Maritime Commission, Detention and 

Demurrage, https://www.fmc.gov/detention-anddemurrage/#:∼:text=In%20dollar%20terms%2C

%20the%20nine,over%20the%20two%2D

year%20period (last visited Oct. 11, 2023). 

2There are two types of common carriers: (1) 

vessel-operating common carriers (VOCCs), also 

called ocean common carriers, and (2) non-vesseloperating common carriers (NVOCCs). 46 U.S.C. 

40102(7), (17), (18). 

3 ‘‘Marine terminal operator’’ (MTO) is defined at 

46 U.S.C. 40102(15). 

4See 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/. 

5Fact Finding 29 Interim Recommendations at 7. 

6Fed. 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-on-demurrage-and-detention-billings/. 

7Advance 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. 

8 87 FR at 8507, 8508–8509 (Questions 1 and 7). 

9 87 FR at 8507, 8509 (Questions 2 and 3). 

10 87 FR at 8508. 

11 Id. 

12 87 FR at 8509 (Question 6). 

13 Id. 

14 87 FR at 8508, 8509 (Question 12). 

15The 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. 

16 87 FR at 8508. 

17 87 FR at 8508, 8509 (Question 14). 

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: Final rule. 

SUMMARY: In accordance with the Ocean 

Shipping Reform Act of 2022, the 

Federal Maritime Commission (the 

Commission or FMC) is issuing 

regulations governing demurrage and 

detention billing requirements. This 

final rule requires common carriers and 

marine terminal operators to include 

specific minimum information on 

demurrage and detention invoices, 

outlines certain detention and 

demurrage billing practices, such as 

determination of which parties may 

appropriately be billed for demurrage or 

detention charges, and sets timeframes 

for issuing invoices, disputing charges 

with the billing party, and resolving 

such disputes. It adopts with changes 

the notice of proposed rulemaking 

published on October 14, 2022. 

Substantive changes allow consignees to 

be billed and clarify the timeframe for 

non-vessel-operating common carriers 

passing through demurrage and 

detention charges to issue their own 

invoices. Non-substantive changes 

improve clarity and remove drafting 

errors. 

DATES: This final rule is effective on 

May 28, 2024, except for instruction 2 

adding § 541.6, and instruction 3 adding 

§ 541.99, which are delayed. The 

Commission will publish a document in 

the Federal Register announcing the 

effective date of these amendments. 

ADDRESSES: To view background 

documents or comments received, you 

may use the Federal eRulemaking Portal 

at www.regulations.gov under Docket 

No. FMC–2022–0066. 

FOR FURTHER INFORMATION CONTACT: 

David Eng, Secretary; Phone: (202) 523– 

5725; Email: secretary@fmc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

As rising cargo volumes have 

increasingly put pressure on common 

carriers, 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 3 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.’’ 4

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.5 The 

Commission voted to move forward 

with this Fact Finding 29 

recommendation on September 15, 

2021.6

On February 15, 2022, the 

Commission issued an ANPRM to 

request industry views on potential 

demurrage and detention billing 

requirements.7 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); 

• Whether the regulations should 

differ based on whether the billing party 

is an NVOCC or a VOCC; 8

• Whether the proposed regulations 

on demurrage and detention billings 

should apply to marine terminal 

operators (MTOs); 9

• What information should be 

required in demurrage and detention 

invoices; 10

• Whether bills should include 

information on how the billing party 

calculated demurrage and detention 

charges.11 For example, the Commission 

requested comments on whether it 

should require the billing party to 

include the following information: 

Æ Identifying clear and concise 

container availability dates in addition 

to vessel arrival dates for import 

shipments; and, 

Æ 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; 12 and 

• 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.13

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 it should 

require billing parties to issue 

demurrage or detention invoices within 

60 days after the charges stopped 

accruing.14 The Commission stated that 

the Uniform Intermodal Interchange 

Agreement (UIIA) 15 currently stipulates 

that invoices be issued within 60 days 

and asked whether the 60-day 

timeframe was effective in addressing 

concerns raised by billed parties, or 

whether a longer or shorter time period 

would be more appropriate.16 In 

addition, the Commission requested 

comments on whether it should regulate 

the timeframe for refunds and, if so, 

what would be an appropriate 

timeframe.17

On June 16, 2022, after the 

Commission issued the ANPRM and 

received comments, the Ocean Shipping 

Reform Act of 2022 (OSRA 2022) was 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14331 

18Public Law 117–146, 136 Stat. 1272 (2022). 

19Public Law 117–146 at Sec. 7(a)(1), 136 Stat. at 

1274 (codified at 46 U.S.C. 41104(a)(15)). 

20Public Law 117–146 at Sec. 7(a)(2), 136 Stat. at 

1275 (codified at 46 U.S.C. 41104(d)(2)). 

21Public Law 117–146 at Sec. 7(a)(2), 136 Stat. at 

1275 (codified at 46 U.S.C. 41104(f)). 

22Public Law 117–146 at Sec. 7(b)(1), 136 Stat. at 

1275. 

23Public Law 117–146 at Sec. 7(b)(2), 136 Stat. at 

1275 (emphasis added). 

24 Id. 

25 87 FR 62341. 

26Bass Tech International (FMC–2022–0066– 

0230); National Industrial Transportation League 

(FMC–2022–0066–0230–0104). 

enacted into law.18 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.19

OSRA 2022 then lists the minimum 

information that common carriers must 

include in a demurrage or detention 

invoice: 

• date that 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.20

Failure to include the required 

information on a demurrage or 

detention invoice eliminates any 

obligation of the billed party to pay the 

applicable charge.21 In addition, OSRA 

2022 authorizes the Commission to 

revise the minimum information that 

common carriers must include on 

demurrage or detention invoices in 

future rulemakings. 

OSRA 2022 additionally 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.22 OSRA 2022 

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)[.]’’ 23

Specifically, the Commission’s 

rulemaking must clarify ‘‘which parties 

may be appropriately billed for any 

demurrage, detention, or other similar 

per container charges.’’ 24

On October 14, 2022, the Commission 

published a notice of proposed 

rulemaking (NPRM) that would require 

common carriers and marine terminal 

operators to include specific minimum 

information on demurrage and 

detention invoices and outlined certain 

billing practices relevant to appropriate 

timeframes for issuing invoices, 

disputing charges with the billing party, 

and resolving such disputes.25 The 

proposed rule addressed considerations 

identified in the Ocean Shipping 

Reform Act of 2022. The proposed rule 

sought comment on the adoption of 

minimum information that common 

carriers must include in a demurrage or 

detention invoice; the addition to this 

list of information that must be included 

in or with a demurrage or detention 

invoice; a proposed definition of 

prohibited practices clarifying which 

parties may be appropriately billed for 

demurrage or detention charges; and 

billing practices that billing parties must 

follow when invoicing for demurrage or 

detention charges. 

II. Comments 

In response to the NPRM published 

October 14, 2022, the Commission 

received 191 comments from interested 

parties. All major groups of interested 

persons were represented in the 

comments: vessel-operating common 

carriers (VOCCs), non-vessel-operating 

common carriers (NVOCCs), marine 

terminal operators (MTOs), motor 

carriers, beneficial cargo owners (BCOs), 

ocean transportation intermediaries 

(OTIs), third party logistics providers, 

customs brokers, bi-partisan groups of 

the U.S. House of Representatives, 

another Federal agency, and the 

National Shipping Advisory Committee 

(the Commission’s federal advisory 

committee). Comments were submitted 

by individuals, large and small 

companies, and by national trade 

associations. All comments submitted 

on the NPRM are available at https://

www.regulations.gov/docket/FMC-2022- 

0066/comments. 

About 75 percent of commenters 

supported the rule, about 15 percent 

questioned the rule, and 10 percent did 

not specify. Motor carriers 

overwhelmingly support the entire rule. 

BCOs mostly support the rule but some 

object to prohibiting others from being 

billed. NVOCCs and OTIs generally 

supported the rule, but with many 

objecting to the inclusion of NVOCCs. 

VOCCs overwhelmingly questioned or 

did not support the rule. Nearly all 

VOCCs questioned the rule prohibiting 

billing other parties and the timing of 

billing requirements. About half of 

VOCCs questioned the required 

information from the ANPRM that the 

Commission added to the information 

specifically required by OSRA 2022. 

MTOs overwhelmingly questioned the 

rule, with most arguing these 

regulations should not apply to MTOs. 

The top three issues addressed by 

commenters were: (1) concerns with the 

prohibition on billing other parties that 

are not contractually connected, (2) 

concerns with additional information 

the Commission proposed to require in 

addition to the OSRA 2022 mandated 

information, and (3) concerns with the 

time periods for billing. 

These comments are addressed in the 

discussion that follows. 

III. Discussion of Comments 

A. § 541.1 Purpose 

Issue: Two commenters requested that 

‘‘minimum’’ be added to the second 

sentence before ‘‘procedures’’ to mirror 

the use of ‘‘minimum’’ before 

‘‘information’’ in the first sentence.26

FMC response: FMC declines to make 

the proposed change. Neither 

commenter provided sufficient 

justification as to why such a change 

would provide additional clarity. The 

Commission has drafted § 541.1 to 

reflect the language of OSRA 2022. 

B. § 541.2 Scope and Applicability 

1. Regulation of MTO Demurrage and 

Detention Billing Practices 

(a) FMC’s Authority To Regulate 

Issue: MTOs and MTO trade 

associations argued that MTOs should 

not fall within the scope of the rule. 

MTOs offered many reasons why they 

should not be subject to the proposed 

regulations. The majority presented 

their interpretation of the effect that the 

legislative process leading to the 


khammond on DSKJM1Z7X2PROD with RULES3
14332 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

27E.g., Husky Terminal and Stevedoring, LLC 

(FMC–2022–0066–0248); Port Houston (FMC–2022– 

0066–0268). 

28Husky Terminal and Stevedoring, LLC (FMC– 

2022–0066–0248). 

29National Association of Waterfront Employers 

(FMC–2022–0066–0276); Port of NY/NJ Sustainable 

Services Agreement (FMC–2022–0066–0218). 

NAWE and PONYNJSSA also argued that: (1) the 

only way OSRA 2022 can be harmonized with 46 

U.S.C. 41102(c) is by excluding MTOs from the 

proposed rule’s substantive demurrage and 

detention billing requirements, and (2) if 46 U.S.C. 

41102(c) and OSRA 2022 cannot be harmonized, 

the more specific statute, OSRA 2022, should 

control. 

30Port Authority of New York & New Jersey 

(FMC–2022–0066–0226); Port Houston (FMC–2022– 

0066–0268); West Coast MTO Agreement (FMC– 

2022–0066–0229). 

31Port Authority of New York & New Jersey 

(FMC–2022–0066–0226); American Association of 

Port Authorities (FMC–2022–0066–0255); West 

Coast MTO Agreement (FMC–2022–0066–0229). 

32Letter from Jake Auchincloss and Brian Babin, 

U.S. House Representatives (Aug. 17, 2023) (FMC– 

2022–0066–0282). The Congressmen also took issue 

with a recent Commission decision finding the 

imposition of equipment charges on a holiday 

weekend at odds with the incentive principle. That 

issue is outside the scope of this rulemaking. 

33Letter from John Garamendi, Dusty Johnson, 

Jim Costa, David Valado, Mike Thompson, and 

Jimmy Panetta, U.S. House Representatives (Jan. 2, 

2023)(FMC–2022–0066–0279). 

34 Id. (‘‘Since enactment of the Ocean Shipping 

Reform Act of 2022, we have heard reports of 

marine terminal operators invoicing their own 

charges for demurrage and detention separate from 

those charged by ocean carriers. This practice 

directly contradicts written comments by the 

National Association of Waterfront Employers—the 

trade association for marine terminal operators—on 

the House discussion draft and to the Committee on 

Transportation and Infrastructure in 2021.’’) 

35 Id. 

36National Association of Waterfront Employers 

(FMC–2022–066–0276). 

37American Association of Port Authorities 

(FMC–2022–0066–0255); West Coast MTO 

Agreement (FMC–2022–0066–0229); Trapac, LLC 

(FMC–2022–0066–0136). 38 Interpretive Rule on Demurrage and Detention 

Under the Shipping Act, 84 FR 48850, 48852 (Sep. 

17, 2019); Interpretive Rule on Demurrage and 

Detention Under the Shipping Act, 85 FR 29638 

(May 18, 2020); Fact Finding Investigation No. 28, 

Final Report (Dec. 3, 2018), available at: https://

www2.fmc.gov/readingroom/documents/20973; 

Fact Finding Investigation No. 29, Final Report 

(May 31, 2022), available at: https://www.fmc.gov/ 

wp-content/uploads/2022/06/FactFinding29

FinalReport.pdf; see also California v. United 

States, 320 U.S. 577, 584–85 (1944) (interpreting the 

analogous provision in the Shipping Act of 1916 as 

applying to demurrage); Am. Export-Isbrandtsen 

Lines, Inc. v. Fed. Mar. Comm’n, 444 F.2d 824, 829 

(D.C. Cir. 1970) (interpreting the analogous 

provision in the Shipping Act of 1916 as applying 

to detention). 

39 46 U.S.C. 46105(a). 

enactment of OSRA 2022 should have, 

which they believe demonstrates that 

Congress intended to prohibit inclusion 

of MTOs in this rulemaking. MTOs 

pointed first to how Congress amended 

46 U.S.C. 41104, which applies to 

common carriers, not MTOs.27 MTOs 

argued that Congress deliberately chose 

not to amend 46 U.S.C. 41106 when it 

added invoicing requirements to 46 

U.S.C. 41104, so that invoicing 

requirements would only apply to 

carriers, not to MTOs.28 The National 

Association of Waterfront Employers 

(NAWE) and the Port of NY/NJ 

Sustainable Services Agreement 

(PONYNJSSA) also argued that 

Congress’s choice not to add invoicing 

requirements to 46 U.S.C. 41102, which 

applies to both MTOs and carriers, 

precludes the Commission from 

including MTOs in the scope of this 

regulation.29 Most commonly, these 

commenters pointed out that Congress, 

and specifically the House of 

Representative’s version of OSRA 2021, 

originally included MTOs in the 

invoicing requirements.30 The MTOs 

argue that Congress, late in the process, 

chose to exempt MTOs from compliance 

with demurrage and detention 

requirements in the enacted version of 

OSRA 2022.31 Two members of 

Congress, Congressman Jake 

Auchincloss and Congressman Brian 

Babin, wrote jointly [August 17th 

Congressional Letter] to make this 

argument, and stated that including 

MTOs within the scope of the regulation 

would threaten stability and cargo 

fluidity at United States ports.32

NAWE also argued that the 

Commission cannot enforce 46 U.S.C. 

41102(c) here without contravening the 

Commission’s Interpretive Rule at 46 

CFR 545.4(b). NAWE stated that the 

Commission’s Interpretive Rule requires 

that an impermissible ‘‘practice’’ occur 

on a ‘‘normal, customary, and 

continuing basis,’’ while the proposed 

rule would penalize any isolated 

invoice omission. NAWE argued that 

taking action in a case alleging a single 

shipment violation is an implicit repeal 

of the agency’s Interpretive Rule at 

§ 545.4 without public notice and 

comment. 

Other members of Congress submitted 

comments on the proposed rule as well, 

but in support of the inclusion of MTOs 

in this rule.33 A letter from these 

members of Congress [January 2nd 

Congressional Letter] stated that since 

authoring OSRA 2022, they became 

aware that MTOs are invoicing their 

own demurrage and detention charges 

separate from VOCC charges. They 

pointed out that this invoicing practice 

directly contradicts the statements of 

NAWE to Congress during the drafting 

of OSRA 2022.34 The letter stated that 

they support applying any demurrage 

and detention invoicing requirements 

that apply to VOCCs to MTOs as well, 

with reasonable exceptions for 

demurrage charges set by public port 

tariffs and where MTOs are acting only 

as a collections agent.35

FMC response: The Commission has 

the statutory authority to apply this rule 

to MTOs and declines to exclude them 

from the duties and responsibilities of 

issuing accurate demurrage and 

detention invoices. Commenters raised 

two major arguments against the 

Commission’s proposed inclusion in the 

regulations of MTOs. Commenters 

argued that the Commission did not 

have authority to apply the regulations 

to MTOs 36 and that it should not apply 

regulations to MTOs for a variety of 

reasons addressed below individually.37

The Commission has clear statutory 

authority to regulate MTOs under 

section 41102(c). There is also a clear 

need, based on the record of this 

rulemaking, for these regulations to 

address MTOs demurrage and detention 

invoices sent to entities other than 

VOCCs. 

Section 41102(c) of Title 46 prohibits 

common carriers, MTOs, and ocean 

transportation intermediaries from 

failing to establish, observe, and enforce 

just and reasonable regulations and 

practices relating to or connected with 

the receiving, handling, storing, or 

delivering property. The Commission 

has authority under 46 U.S.C. 46105(a) 

to prescribe regulations to carry out its 

duties and powers. The Commission has 

repeatedly explained that the issue of 

detention and demurrage charges falls 

within the prohibitions of 46 U.S.C. 

41102(c).38 Further, the plain language 

of 46 U.S.C. 41102(c) describes exactly 

the type of conduct this rule intends to 

regulate. This section prohibits an MTO 

from ‘‘failing to establish, observe, and 

enforce just and reasonable regulations 

and practices relating to or connected 

with receiving . . . [or] storing 

property.’’ This rule issued pursuant to 

the Commission’s power to issue 

regulations 39 to define these 

prohibitions, as well as those found in 

OSRA 2022, interprets what constitutes 

just and reasonable practices on 

invoicing and charges related to the use 

of marine terminal space or shipping 

containers. The Commission concludes 

that this rule will help ensure that 

MTOs’ demurrage and detention billing 

practices are just and reasonable 

pursuant to section 41102. 

Arguments that the Commission lacks 

this authority because Congress chose to 

place detailed invoicing requirements in 

a section that only applies to carriers, or 

because Congress removed requirements 

that would expressly apply to MTOs 

during the statutory drafting process, do 

not address the Commission’s preVerDate Sep<11>2014 20:07 Feb 23, 2024 Jkt 262001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 E:\FR\FM\26FER3.SGM 26FER3

khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14333 

40The Commission notes that canons of 

construction, such as reviewing legislative drafting 

history, are most useful in evaluating an 

interpretation of an ambiguous statute or regulation. 

See, e.g., Green v. Bock Laundry Mach. Co., 490 

U.S. 504, 508–09 (1989)(‘‘We begin by considering 

the extent to which the text of [the disputed 

provision] answers the question before us. 

Concluding that the text is ambiguous with respect 

to [that question], we then seek guidance from 

legislative history . . .’’). But that is not why the 

commenters raised the legislative drafting history. 

The commenters would have the Commission 

affirmatively read into existence a prohibition on 

regulating MTO demurrage and detention invoices 

because some versions of legislation contemplated 

by Congress laid out statutory requirements and 

others did not. The absence of a statutory 

requirement is not proof of a prohibition on issuing 

regulations. If Congress wanted to prohibit the 

Commission from regulating MTO demurrage and 

detention invoices, it could have done so. The 

Commission does not agree that the legislative 

history prohibits inclusion of MTOs in these 

regulations. 

41Public Law 117–146, 136 Stat. 1272, at 1275. 

42 Garamendi, Johnson, Costa, Valado, Thompson, 

and Panetta, supra note 33. 

43See Balsam Brands (FMC–2022–0066–0095) 

(arguing that excluding MTOs potentially creates a 

loophole that would undermine the purposes and 

effectiveness of the regulation). 

44Auchincloss and Babin, supra note 32. 

45Many MTOs also made the argument that the 

legislative history of OSRA 2022 shows that 

Congress intended to exempt MTOs from 

demurrage and detention invoice requirements. 

American Association of Port Authorities (FMC– 

2022–0066–0255); West Coast MTO Agreement 

(FMC–2022–0066–0229); Fenix Marine Services, 

Ltd. (FMC–2022–0066–0186); Husky Terminal and 

Stevedoring, LLC (FMC–2022–0066–0248); Port of 

Houston (FMC–2022–0066–0268); Trapac, LLC 

(FMC–2022–0066–0136); National Association of 

Waterfront Employers (FMC–2022–0066–0276). 

46 Garamendi, Johnson, Costa, Valado, Thompson, 

and Panetta, supra note 33. 

47 ‘‘[T]he 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.’’ See 87 FR at 62347. 

48Harbor Trucking Association (FMC–2022– 

0066–0261). 

49As noted above, demurrage and detention 

invoices between MTOs and VOCCs are not subject 

to this rule. 

existing and continuing legal authority 

to issue demurrage and detention 

invoicing regulations that apply to 

MTOs even before OSRA 2022. The 

actual statutory text of 46 U.S.C. 

41102(c) and Congress’s direction to use 

46 U.S.C. 41102(c) to define prohibited 

demurrage and detention practices for 

marine terminal operators is clear and 

does not necessitate resorting to the 

incomplete history of the legislative 

drafting process of OSRA 2022.40

Moreover, Congress explicitly included 

in OSRA 2022 the direction that the 

Commission initiate a rulemaking to 

further define prohibited practices by 

MTOs, among others, under 46 U.S.C. 

41102(c) regarding the assessment of 

detention and demurrage.41 Thus, in 

OSRA 2022, Congress amplified the 

Commission’s existing authority to issue 

regulations that govern the issuance of 

demurrage and detention invoices in 

section 41102(c) and added to that 

authority a mandate to further define 

prohibited practices. The identification 

of MTOs within section 7(b), entitled 

‘‘Common Carriers,’’ does not support 

the view that Congress intended to limit 

the scope of its directive to the 

Commission to ensuring that invoices 

are accurate. Instead, the plain language 

of the statute shows an intent by 

Congress to address in a targeted 

manner the failures of the current 

invoicing process. Such a targeted 

approach requires ensuring that MTOs, 

as well as VOCCs and NVOCCs, issue 

accurate invoices. 

The need to include MTOs in this rule 

is supported by the comments. 

Excluding MTOs from this rule is likely 

to create a regulatory loophole, 

significantly affecting the ability of the 

rule to effect change in the current 

invoicing process. The comments 

support a finding that MTOs are 

invoicing for their own demurrage and 

detention charges.42 Common carriers, 

the usual contractual party, could 

simply have MTOs issue their 

demurrage and detention invoices to 

avoid the necessary invoicing 

requirements this rule puts into place, 

and invoices coming from MTOs would 

not be required to comply with either 

Congress’s instructions at 46 U.S.C. 

41104(d) or these regulations. Billed 

parties would receive a significant 

portion of invoices from MTOs with 

whatever information MTOs chose to 

provide, which may not include the 

critical information a billed party needs 

to ensure the bill is accurate. The MTO 

as the billing party would not be subject 

to the dispute resolution processes 

contained in these rules. Not including 

MTOs in the scope of this rule would 

meaningfully reduce the effectiveness of 

the rule and perpetuate current 

problematic invoicing practices. The 

Commission finds, as supported by the 

comments, that finalizing a rule that 

excluded MTOs would undermine 

Congress’s intent as expressed through 

the plain language of OSRA 2022.43

The August 17th Congressional Letter 

and other commenters argued that it 

was not Congress’s intent that these 

rules apply to MTOs.44 The August 17th 

Congressional Letter urged the removal 

of MTOs from the rulemaking’s 

substantive requirements because the 

legislative history shows that Congress 

intended to remove MTOs from 

demurrage and detention invoicing 

requirements and such requirements 

could potentially increase port 

congestion.45 However, as noted above, 

the legislative history of OSRA 2022 

cannot be read to prohibit agency action 

to address an issue the legislation itself 

identifies as in need of resolution. 

Further, the January 2nd 

Congressional Letter urged the 

Commission to ensure the inclusion of 

MTOs in the Commission’s final rule. 

Congressmen Garamendi, Johnson, 

Costa, Valado, Thompson, and Panetta 

wrote the January 2nd Congressional 

Letter.46 The January 2nd Congressional 

Letter reported that comments 

submitted to Congress by NAWE in 

2021 stated that MTOs do not invoice 

their own charges for detention and 

demurrage separate from those charged 

by ocean common carriers. Since then, 

the signatories of the January 2nd 

Congressional Letter state they have 

received reports of MTOs invoicing 

their own demurrage and detention 

charges separate from those of ocean 

common carriers. The January 2nd 

Congressional Letter concluded that all 

requirements in the final rule for 

invoicing demurrage and detention that 

cover ocean common carriers should 

apply to MTOs. The Commission finds 

the argument from the January 2nd 

Congressional Letter persuasive and 

consistent with the comments 

indicating that MTO invoicing is 

prevalent. It is critical to include MTOs 

in the final rule to ensure meaningful 

change to existing industry practice 

creating inefficiencies and confusion. 

With respect to the specific 

information required in invoices, 

Congress and the President have already 

spoken on what they believe to be 

reasonable demurrage and detention 

invoicing requirements for billing 

parties, as evidenced by what they 

required of common carriers at 46 

U.S.C. 41104(d). The Commission 

believes that these elements are 

appropriate to require in a demurrage 

and detention invoice sent to a billed 

party, regardless of whether the invoices 

come from an MTO or a common 

carrier, because these elements are 

mandated by Congress and supported by 

past agency investigation and review.47

The need for consistency in demurrage 

and detention invoicing further 

supports requiring MTOs to comply 

with this rule, because billed parties 

should be able to expect a standardized 

set of information in a demurrage or 

detention invoice,48 regardless of 

whether it comes from a carrier or an 

MTO.49

Requiring standardized practices from 

MTOs also addresses the confusion 

raised in comments about what actual 

role MTOs play in invoicing for 

demurrage and detention. Some MTOs 


khammond on DSKJM1Z7X2PROD with RULES3
14334 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

50 Garamendi, Johnson, Costa, Valado, Thompson, 

and Panetta, supra note 33. 

51Fenix Marine Services (FMC–2022–0066– 

0186); West Coast MTO Agreement (FMC–2022– 

0066–0229). 

52Trapac, LLC (FMC–2022–0066–0136). 

53Ports America/SSA Marine (FMC–2022–0066– 

0249). 

54Fenix Marine Services, Ltd. (FMC–2022–0066– 

0186). 

55Husky Terminal and Stevedoring, LLC (FMC– 

2022–0066–0248). 

56American Association of Port Authorities 

(FMC–2022–0066–0255). 

57See, e.g., Order of Investigation, Fact Finding 

Investigation No 28. 

58See, e.g., American Association of Port 

Authorities (FMC–2022–0066–0255); West Coast 

MTO Agreement (FMC–2022–0066–0229). 

59E.g., Cross Equip. Ltd. v. Hyundai Merch. 

Marine (Am.) Inc., 214 F.3d 1349 (Table) (5th Cir. 

2000)(2000 WL 633596)(citing e.g., 4,885 Bags of 

Linseed, 66 U.S. (1 Black) 108, 109 (1861)). 

told Congress that they do not issue 

their own demurrage and detention 

invoices separate from carriers.50 Some 

MTOs have told the Commission that 

they do not send traditional demurrage 

and detention invoices, but instead 

issue ‘‘demurrage receipts’’ or ‘‘disclose 

charges.’’ 51 One MTO contended to the 

Commission that it does not send 

demurrage and detention invoices to 

BCOs or truckers, and that it is VOCCs 

who charge BCOs demurrage and 

detention; but the same MTO also said 

that MTOs sometimes collect demurrage 

and detention on behalf of VOCCs.52

Other MTOs said that they do send 

demurrage and detention invoices.53

Yet, even if these MTOs agreed that they 

do send demurrage and detention 

invoices, they disagreed with the idea 

that these invoices should be subject to 

the same regulation as other billing 

parties. 

These inconsistent statements by 

MTOs highlight the need for clear rules 

governing all demurrage and detention 

billing parties so that billed parties 

receive accurate information to facilitate 

faster payment and dispute resolution. 

Allowing MTOs to escape the basic 

requirements of this rule by artfully 

styling their demurrage and detention 

invoices as ‘‘receipts’’ or ‘‘disclosures’’ 

would undermine the statute, frustrate 

the Commission’s expressed intention to 

simplify and clarify demurrage and 

detention invoicing for billed parties, 

and leave in place the confusing status 

quo that spurred Congress to pass OSRA 

2022. 

Further, the logic of the MTO 

argument against regulation is not 

persuasive. If, as some MTOs claim, 

they do not invoice shippers, BCOs, and 

truckers for demurrage and detention, 

the rule would not affect their practices 

in any event. If MTOs do send invoices, 

however, they should abide by the same 

rules as any other billing party. If they 

do have contractual privity, they should 

be able to obtain any information 

necessary to issue a compliant invoice 

through that contract. If MTOs do not 

have the information required to issue 

invoices consistent with these rules, 

they should not send invoices. If they 

still need to send these invoices, they 

should obtain all of the required 

information like any other billing party. 

If they cannot obtain that information 

and they still wish to collect a charge, 

they should forward the invoice to a 

billing party with whom they have a 

contractual relationship and that can 

comply with this rule, and collect the 

demurrage and detention charge after 

providing the billing party accurate 

information about the charge. 

Some commenters further challenged 

the Commission’s authority to regulate 

MTOs pursuant to 46 U.S.C. 41102. 

NAWE argued that the Commission 

lacks authority to regulate MTO 

invoicing through the general legal 

authority to regulate unjust and unfair 

practices at 46 U.S.C. 41102(c). NAWE 

argued that a more specific statutory 

provision controls over a more general 

provision, and that when two statutes 

cannot be harmonized, the later in time 

statute controls over the earlier. NAWE 

contended that 46 U.S.C. 41102(c) and 

OSRA 2022 can be harmonized, by 

simply omitting MTOs from the 

proposed rule. If, however, the 

authorities cannot be harmonized, it 

contends, the Commission must follow 

OSRA 2022 as it is the more specific 

and later-in-time statute. 

As previously noted, the Commission 

has explained that it interprets 46 U.S.C. 

41102(c) as governing the invoicing of 

demurrage and detention. Nothing in 

OSRA 2022 prohibited the Commission 

from regulating MTO demurrage and 

detention invoicing. Therefore, the 

Commission disagrees with NAWE’s 

argument that the statutes cannot be 

harmonized. 

(b) Burden on MTOs To Comply With 

the Rule and Security Concerns 

Issue: MTOs argued that applying 

these rules to MTOs would force them 

to expend significant resources to 

overhaul their websites and create 

additional security measures.54

FMC response: MTOs did not submit 

estimates of or proposals for what work 

would be needed, or would cost, to 

modify their systems to comply with 

this rule. One MTO explained they have 

already invested significant resources to 

modify their system to incorporate the 

information from carriers required by 

OSRA 2022. This certainly suggests it is 

reasonable to expect MTOs to modify 

their systems to comply with this rule. 

It is not clear why MTOs could do this 

for their VOCC customers’ invoices but 

not their own invoices.55

(c) Changes to Current MTO Practices 

Issue: MTOs argued that this rule 

would upend settled practices and 

increase confusion and congestion at 

ports.56

FMC response: Current billing 

practices and the lack of transparency in 

those practices have raised concerns 

about whether current practices allow 

for a competitive and reliable American 

freight delivery system.57 The changes 

to current practices this rule requires are 

meant to change the settled practices 

that do not ensure accuracy, clarity, and 

visibility of charges. This rule seeks to 

improve upon existing practices that do 

not provide adequate information for 

the efficient invoicing of charges. 

Further, these changes provide clarity 

on how billed parties access the dispute 

resolution process. Requiring targeted 

information may ultimately lead to 

fewer disputed bills and therefore 

streamline the demurrage and detention 

billing process. As discussed further in 

this preamble, the Commission is 

delaying implementation of the rule by 

90 days. The Commission believes that 

this is sufficient time to allow MTOs 

and other regulated parties to make the 

necessary changes to their business 

operations in order to comply with the 

rule. 

(d) Impacts on Common Law Lien 

Rights 

Issue: MTOs argued that the rule 

would force MTOs to waive their 

common law lien rights. MTOs said 

they would have to choose between: (1) 

releasing cargo without demurrage or 

detention charges being paid (waiving 

their lien rights), or (2) refunding any 

collected charges if the invoice does not 

comply with this final rule.58

FMC response: This rule does not 

impact traditional cargo lien rights. This 

rule allows MTOs to make their own 

business decisions about whether or not 

they require demurrage and detention 

charges to be paid prior to releasing 

cargo. Contrary to the commenters’ 

assertions, releasing cargo without 

payment of demurrage and detention 

charges does not automatically waive 

cargo lien rights. Cargo liens are lost 

upon delivery only if the cargo is 

delivered unconditionally.59 It is well 

established law that a lien can survive 

delivery if the parties have contracted 

for such and the release has been 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14335 

60 Id. (citing e.g., The Bird of Paradise, 72 U.S. 

545, 555 (1866)). 

61See also 46 U.S.C. 41310(b) (Charge complaints 

authority states that Commission is required to 

investigate compliance with section 41102 of ‘‘the 

charge’’ received and does not specify that multiple 

instances must be alleged for the Commission to 

investigate and order a refund and/or civil penalty). 

62E.g., Landstar Exp. Am., Inc. v. Fed. Mar. 

Comm’n, 569 F.3d 493, 495 (D.C. Cir. 2009). 

conditioned.60 In some circumstances 

releasing cargo conditionally might 

potentially carry additional 

administrative burden and risk, but it 

may be advantageous to a particular 

MTO in other circumstances. 

Alternatively, MTOs can require 

demurrage and detention charges be 

paid prior to releasing cargo. This 

option carries its own risks, however. 

As the commenter stated, if an MTO 

collects demurrage and detention 

charges and then those charges are later 

successfully contested by the billed 

party, the MTO must refund the 

incorrect charges. Under this rule, billed 

parties have 30 calendar days from the 

date the invoice is issued to contest 

demurrage and detention charges. This, 

however, should serve as an incentive 

for the invoices to be correct when 

issued. MTOs assert that issuing correct 

invoices will be difficult to impossible 

for them to do under the new rule 

because they do not know the end date 

of free time. The Commission is not 

convinced by this argument. MTOs have 

not presented evidence to the 

Commission that such information is 

unattainable by MTOs, only that they do 

not presently have it. The information 

needed to calculate this charge is 

knowable in advance of the release of 

cargo; it can be pulled from the bill of 

lading, tariff, terminal schedule, or other 

relevant transportation documents 

MTOs already have access to and billing 

formulas created that allow accurate 

invoices to be created quickly and 

accurately once an availability date is 

known (and projected outward for each 

day cargo pick-up is delayed). 

(e) Impact on the Commission’s 

Interpretive Rule Codified at 46 CFR 

545.4 

Issue: Commenters argued that the 

Commission’s proposed rule amounts to 

an implicit repeal of the Commission’s 

Interpretive Rule at 46 CFR 545.4 and 

therefore that the Commission’s action 

violated the Administrative Procedure 

Act (APA). 

FMC response: The Commission has 

solicited public comment in both an 

ANPRM and NPRM about whether the 

scope of this rule should cover MTO 

invoicing. The Commission stated 

unequivocally in the NPRM that MTOs 

would be subject to this rule. MTOs 

have had repeated and public notice 

that the Commission was considering 

this option, so the Commission 

disagrees with concerns that the rule 

lacked adequate time for public notice 

and comment. Any argument about 

what parts of the Interpretive Rule at 46 

CFR 545.4 remains in force is inherently 

an argument about that guidance and 

not about whether the Commission’s 

instant rule complies with the APA. 

Some commenters argue the rule is 

inconsistent with the Interpretive Rule 

at 46 CFR 545.4. The Commission finds 

that OSRA 2022 specifically required 

the Commission to issue rules under 46 

U.S.C. 41102(c) that further define the 

prohibited practices by common 

carriers, marine terminal operators, and 

shippers, regarding the assessment of 

detention or demurrage charges. The 

plain language of this directive and the 

plain language of 41104(d) do not 

require evidence of multiple violations. 

This view is further supported by 46 

U.S.C. 41104(f) which functions to void 

an invoice if a single required element 

is not included, not when the 

complainant can show multiple 

instances of such behavior.61 Thus, in 

the narrow context of demurrage and 

detention invoices issued by MTOs and 

common carriers, the Commission 

concludes that Congress dictated that 

evidence of a single violation is 

sufficient. To the extent that the 

commenters argue this narrowing by 

Congress repeals the Commission’s 

entire Interpretive Rule codified at 46 

CFR 545.4, the Commission disagrees. 

(f) MTOs Collecting Demurrage and 

Detention on Behalf of Other Parties 

Issue: Several MTOs have raised 

questions about how the rule does, and 

should, apply to them when they are 

collecting demurrage and detention 

charges on behalf of VOCCs, NVOCCs, 

and BCOs. For example, Maher 

Terminals said that the definition of 

‘‘billing party’’ in the proposed rule 

does not clarify the identity of the 

billing party when an MTO bills and 

collects on behalf of a VOCC. (The rule 

would define ‘‘billing party’’ as ‘‘the 

ocean common carrier, marine terminal 

operator, or non-vessel-operating 

common carrier who issues a demurrage 

or detention invoice.’’) Maher Terminals 

proposed a revision to the definition 

that would have made clear that when 

an MTO bills on behalf of a VOCC/ 

NVOCC/BCO that the VOCC/NVOCC/ 

BCO is the billing party. 

FMC response: In the scenario 

described above, it is assumed that the 

MTO would be acting as an agent of the 

VOCC/NVOCC/BCO. Whether an MTO 

must comply with the rule in this case 

depends upon the contractual duties of 

the MTO as an agent. Traditional rules 

of agency remain applicable under the 

Shipping Act.62 According to the 

Restatement (Third) Of Agency § 1.01 

(2006): ‘‘As defined by the common law, 

the concept of agency posits a 

consensual relationship in which one 

person, to one degree or another or 

respect or another, acts as a 

representative of or otherwise acts on 

behalf of another person with power to 

affect the legal rights and duties of the 

other person. . . .’’ The principal has a 

right to control the actions of the agent, 

but ‘‘a principal’s failure to exercise the 

right of control does not eliminate it.’’ 

Restatement (Third) Of Agency § 1.01 

(2006). The Restatement also notes that 

an enforceable contract, written or oral, 

does not need to exist for there to be a 

principal-agent relationship. 

Restatement (Third) Of Agency § 1.01 

(2006). 

While the circumstances of each case 

must be known to make any particular 

determination as to whether an agency 

relationship exists, it is fair to assume, 

based on the Restatement’s description 

of agency that the majority of instances 

where MTOs collect demurrage and 

detention charges on behalf of another 

party likely create an agency 

relationship. Thus, except to the extent 

that a principal VOCC or NVOCC has 

not delegated their obligations under 46 

U.S.C. 41104, the agent-MTO must 

assume those obligations when acting to 

collect demurrage and detention 

charges. Of course, the exact principalagent relationship is open to negotiation 

between the principal and agent. An 

agent is free to negotiate the specific 

acts they will or will not undertake on 

behalf of the principal. It is possible that 

in a particular MTO-principal 

demurrage and detention billing 

relationship that the MTO is responsible 

for providing all of the invoice elements 

in 46 U.S.C. 41104(d)(2) while in 

another MTO-principal demurrage and 

detention billing relationship that the 

MTO complies with only certain 

elements of 46 U.S.C. 41104(d)(2) and 

that the invoice must be sent back to the 

principal for completion of the other 

elements before the invoice is issued to 

the billed party. 

2. 46 U.S.C. 41104(e), NVOCC Safe 

Harbor 

Issue: One commenter said that the 

proposed rule did ‘‘not address the safe 

harbor provision provided to NVOCCs 

at 46 U.S.C. 41104(e), which exempts 

NVOCCs from the demurrage and 


khammond on DSKJM1Z7X2PROD with RULES3
14336 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

63National Customs Brokers & Forwarders 

Association of America, Inc. (FMC–2022–0066– 

0180). 

64 87 FR 62341, 62347. 

65Maher Terminals, LLC (FMC–2022–0066– 

0269). 

66Shippers Coalition (FMC–2022–0066–0160). 

67Metro Group Maritime (FMC–2022–0066– 

0209). 

68New York New Jersey Foreign Freight 

Forwarders & Brokers Association, Inc. (FMC– 

2022–0066–0247). 

detention invoice requirements and, 

importantly, liability for any invoice 

inaccuracies when the NVOCC passes 

through an underlying ocean common 

carrier’s invoice.’’ 63 The commenter 

requested that the rule be modified ‘‘to 

ensure NVOCCs remain exempt from 

the demurrage and detention 

requirements when passing through the 

charges or invoice.’’ 

FMC response: The commenter 

misinterprets the language of 46 U.S.C. 

41104(e). The statute does not exempt 

NVOCCs from the demurrage and 

detention invoice requirements of 46 

U.S.C. 41104(d)(2). It merely shifts 

responsibility for refunds or penalties 

under 46 U.S.C. 41104(d)(1) in the 

certain, specified scenario from the 

NVOCC to the ocean common carrier. 

The safe harbor provision is most 

applicable in a situation where an 

NVOCC receives an invoice from a 

VOCC and passes it on to its customers. 

In order for the safe harbor provision to 

apply, however, OSRA 2022 requires 

the Commission to make a finding that 

the non-vessel-operating common 

carrier is not otherwise responsible for 

the charge. The Commission declines to 

make a general finding as part of this 

rulemaking that all NVOCCs are ‘‘not 

otherwise responsible’’ for errors in 

invoices they pass through. Rather, this 

is a fact-based analysis that the 

Commission undertakes on a case-bycase basis. If the Commission finds in a 

particular matter that a violation of 46 

U.S.C. 41104(d)(1) has occurred and 

also has made the relevant finding 

under 46 U.S.C. 41104(e) that the 

NVOCC is not otherwise liable, only 

then is the safe harbor provision 

applicable. 

As discussed in the NPRM, there are 

important reasons for requiring NVOCCs 

to comply with detention and 

demurrage invoicing requirements: 

invoices that a BCO receives from an 

NVOCC may be their only notice of 

detention and demurrage charges and 

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.64 The intent of this rulemaking 

is to ensure that the person receiving the 

bill understands the charges regardless 

of who the billing party is. 

C. § 541.3 Definitions 

1. ‘‘Billing Dispute’’ 

Issue: One commenter raised two 

concerns about the proposed definition 

of ‘‘billing dispute.’’ 65 First, the 

commenter was concerned that under 

the proposed definition, an MTO may 

not know when a ‘‘mere billing inquiry 

is tantamount to a ‘disagreement’ with 

respect to a specific invoice.’’ Second, 

the commenter was concerned that the 

word ‘‘raised’’ does not ‘‘provide 

adequate guidance in this context as it 

suggests that a disagreement is being 

broached for discussion purposes rather 

than being clearly conveyed to the 

billing party as a disagreement.’’ 

FMC response: The Commission has 

removed the term ‘‘billing dispute’’ from 

§ 541.3 in the final rule. ‘‘Billing 

dispute’’ does not need to be defined 

because it is not a term used in 

§§ 541.4–541.99, in either the NPRM or 

final rule. ‘‘Dispute’’ is used in 

§ 541.6(d), but only in the paragraph 

header and does not require further 

definition. 

2. ‘‘Billed Party’’ and ‘‘Billing Party’’ 

(a) Responsibility for Payment 

Issue: One commenter requested that 

the definition of ‘‘billed party’’ be 

amended by replacing ‘‘is responsible 

for the payment of any incurred 

demurrage or detention charge’’ with 

‘‘has contracted with the billing party 

for the ocean carriage or storage of 

good.’’ 66 They were concerned that the 

language ‘‘responsible for the payment’’ 

‘‘reads as a legal conclusion’’ and did 

not comport with the Commission’s goal 

that demurrage and detention invoices 

be billed to persons having a contractual 

relationship with the billing party for 

the carriage or storage of goods. Another 

commenter requested that the 

Commission amend the definition of 

‘‘billed party’’ to include motor carriers 

that control containers to account for 

situations where VOCCs enter directly 

into written contracts with motor 

carriers that use containers in the 

transportation of goods.67

FMC response: The Commission 

declines to make the requested changes. 

With respect to the first comment, the 

definition of ‘‘billed party’’ is simply to 

clarify the rights and responsibilities of 

the party receiving the bill. It is a factbased definition centered on who the 

party is to whom the billing party issues 

the invoice. The definition is not the 

basis of an assessment of whether the 

billed party properly received the 

invoice, which is governed by § 541.4. 

Nothing in this rule prohibits third 

parties from receiving copies of invoices 

or voluntarily paying demurrage or 

detention charges on behalf of the 

shipper/consignee. 

In regard to the second comment, 

there seems to be a misunderstanding 

on the commenter’s part about the rule’s 

applicability. As discussed in the 

NPRM, a primary purpose of this rule is 

to stop demurrage and detention 

invoices from being sent to parties who 

did not negotiate contract terms with 

the billing party. That concern is not 

present where a motor carrier has 

directly contracted with a VOCC. 

Nothing in this rule, either in the 

proposed or final version, prohibits a 

VOCC from issuing a demurrage or 

detention invoice to a motor carrier 

when a contractual relationship exists 

between the VOCC and the motor carrier 

for the motor carrier to provide carriage 

or storage of goods to the VOCC. The 

definition of ‘‘billed party’’ is 

intentionally broad to capture any party 

to whom a detention or demurrage 

invoice is issued. When a VOCC issues 

a detention or demurrage invoice to a 

motor carrier, the VOCC must comply 

with the requirements of part 541. The 

Commission has jurisdiction over 

common carriers, marine terminal 

operators (MTOs), and ocean 

transportation intermediaries (OTIs), 

including over through transportation. 

Without knowing the particulars of the 

hypothetical, in this situation, 

presumably the FMC’s jurisdiction, and 

thus this rule, would apply only to 

cargo moved inland under a through bill 

of lading and contracts between a 

VOCC. A motor carrier not based on a 

through bill of lading would likely be 

outside the scope of this rule. 

(b) Billing Party’s Control of Assets 

Issue: One commenter was concerned 

that the Commission’s proposed 

definition of ‘‘billing party’’ ‘‘is missing 

the requirement that the entity issuing 

the invoice has the right to do so’’ and 

‘‘[t]he regulations should recognize that 

there is a distinction between a billing 

party in control of the assets and one 

that is not, i.e., a non-vessel operating 

common carrier (NVOCC).’’ 68 The 

commenter suggested that the definition 

be amended to read as follows: Billing 

party means the ocean common carrier, 

marine terminal operator, or non-vessel 

operating common carrier who issues a 

demurrage or detention invoice because 

they control the equipment and terminal 

space or are passing through the charges 

for collection. 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14337 

69Meat Import Council of America, Inc./North 

American Meat Institute (FMC–2022–0066–0188); 

Tyson Foods, Inc. (FMC–2022–0066–0225). 

70 87 FR 62341, 62350 (Oct. 14, 2022). 

71CV International, Inc. (FMC–2022–0066–0217). 

72BassTech International LLC (FMC–2022–0066– 

0230); National Retail Federation (FMC–2022– 

0066–0231); Pacific Merchant Shipping Association 

(FMC–2022–0066–0233); Ports America/SSA 

Marine (FMC–2022–0066–0249). 

73American Association of Port Authorities 

(FMC–2022–0066–0255). 

74 87 FR 62341, 62348. 

75Consumer Technology Association (FMC– 

2022–0066–0228). 

76 87 FR 62341, 62348. 

77FMC–2022–0066–0247. 

FMC response: The Commission 

declines to make the requested change. 

In this final rule, the Commission has 

added a 30-day period to § 541.7 for 

NVOCCs to issue an invoice when they 

pass through demurrage and detention 

charges. This is an acknowledgement 

that NVOCCs are not always in control 

of the assets and often receive an 

invoice from a VOCC. For more 

information, see Timeframes for 

NVOCCs in the discussion of comments 

regarding § 541.7. 

(c) Who is a person? 

Issue: Two comments expressed 

concern that the proposed definitions of 

‘‘billed party’’ and ‘‘billing party’’ 

included the term ‘‘person’’ but did not 

provide further clarification on what 

‘‘person’’ means for purposes of the 

rule.69 The commenters recommended 

either adding a cross reference to 

§ 515.2(n) in the definitions or defining 

‘‘person’’ in § 541.3 consistent 

§ 515.2(n). 

FMC response: The Commission 

agrees that identifying a definition for 

the term ‘‘person’’ can be helpful. It has 

added a definition of ‘‘person’’ to 

§ 541.3 that aligns with § 515.2(n). 

(d) Consignees 

The Commission specifically sought 

comments on the NPRM as to whether 

it would be appropriate to allow 

common carriers to bill consignees 

named on the bill of lading as an 

alternative to the shipper.70 In response 

to commenters’ support for including 

consignees as a party to whom an 

invoice can be properly billed, the 

Commission has revised the rule to 

incorporate this change. As part of this 

change, the Commission has added a 

definition of ‘‘consignee’’ to § 541.3 in 

this final rule. For a full analysis of 

comments concerning allowing 

consignees to be billed, see the 

discussion of consignees under § 541.4 

concerning properly issued invoices. 

(e) NVOCCs 

Issue: One NVOCC commenter had 

concerns that the terms ‘‘billed party’’ 

and ‘‘billing party’’ ‘‘do not clearly 

separate the position of the NVOCC,’’ 

who, the commenter noted, can be both 

the billed party (when billed by the 

VOCC), and the billing party (when 

billing the BCO) on the same 

shipment.71

FMC response: The Commission 

acknowledges that there are 

circumstances when an NVOCC is both 

a billed party and a billing party on the 

same shipment. As explained in more 

detail below in the response to 

§ 541.7(c), the Commission has 

amended the rule to allow an extra 

thirty (30) days for NVOCCs to issue an 

invoice when they are passing through 

the charges from a VOCC to a customer. 

The Commission has also added 

§ 541.7(c) to require that when an 

NVOCC informs a VOCC that its 

customer has disputed its invoice, the 

VOCC must then allow the NVOCC 

additional time to dispute the invoice it 

received from the VOCC. NVOCCs must 

still follow the correct procedures for 

issuing an invoice when acting as a 

‘‘billing party’’ and are entitled to the 

same protections as other ‘‘billed 

parties’’ when acting in that capacity. 

3. Demurrage and Detention 

(a) Separate Definitions of ‘‘Demurrage’’ 

and ‘‘Detention’’ 

Issue: Four comments requested that 

the rule separately define ‘‘demurrage’’ 

and ‘‘detention.’’ 72 In support of this 

change, commenters generally made 

generic statements about how billing 

practices are frequently different for 

demurrage compared to detention. 

FMC response: The Commission has 

made the determination not to split 

‘‘demurrage and detention’’ into 

separately defined terms because part 

541 and OSRA 2022 treat both charges 

equally. It may be true that practices 

differ when billing demurrage versus 

detention. None of the commenters, 

however, provided sufficient evidence 

to support what these specific 

differences are and how they would 

require changes to the rule. The 

Commission will continue to monitor 

the matter and retains the authority to 

separately define these terms in a future 

rulemaking for these or other 

regulations if circumstances warrant. 

(b) Ports/MTO Demurrage Versus 

VOCC/NVOCC Demurrage 

Issue: One commenter said that the 

rule needed to distinguish between 

demurrage and detention fees charged 

by ports and MTOs and those charged 

by VOCCs and NVOCCs because of the 

difference in underlying agreements and 

the fact that the charges serve different 

purposes.73

FMC response: The Commission 

declines to make the requested change. 

As noted in the NPRM, the definition of 

‘‘demurrage or detention’’ in this rule 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.74 The 

Commission has the same goal in this 

rule of ensuring all charges having the 

purpose or effect of demurrage or 

detention are covered and believes the 

definition proposed is the most 

accurate. 

(c) Chassis and Other Special 

Equipment 

Issue: One commenter requested that 

the Commission expand the proposed 

definition of ‘‘demurrage and detention’’ 

to include charges related to the use of 

chassis and other special equipment.75

FMC response: The Commission 

declines to make the requested change. 

As noted in the NPRM, the definition of 

‘‘demurrage or detention’’ in this rule is 

the same as the scope used in 46 CFR 

545.5(b).76 Section 7, paragraph (b)(2) of 

OSRA 2022 directs that this rulemaking 

‘‘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 2020 Interpretive Rule].’’ 

Expanding the scope of the definition of 

‘‘demurrage and detention’’ in this rule 

beyond the term’s definition in the 2020 

Interpretive Rule would be contrary to 

statute because it would require us to 

address issues not identified in that 

Interpretive Rule. 

(d) ‘‘Marine Terminal Space’’ 

Issue: The Commission received two 

comments related to the phrase ‘‘marine 

terminal space’’ in the definition of 

‘‘demurrage and detention.’’ New York 

New Jersey Freight Forwarders & 

Brokers Association, Inc. requested 

clarification of what ‘‘marine terminal 

space’’ means in the ‘‘demurrage or 

detention’’ definition.77 They asked 

whether ‘‘marine terminal space’’ 

includes when a through bill of lading 

is used to transport imported 

merchandise into an interior port or rail 

yard and suggested that specific 

language be added to the definition of 

‘‘detention and demurrage’’ to clarify 

this. The other commenter, International 

Dairy Foods Association, requested that 

the Commission include a provision in 

the final rule indicating that container 

dwell fees are ‘‘detention and 

demurrage charges’’ since they are 


khammond on DSKJM1Z7X2PROD with RULES3
14338 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

78FMC–2022–0066–0244. 

79Meat Import Council of America, Inc./North 

American Meat Institute (FMC–2022–0066–0188); 

Tyson Foods, Inc. (FMC–2022–0066–0225). 

80BassTech International, LLC (FMC–2022–0066– 

0230). 

81E.g, Harbor Trucking Association (FMC–2022– 

0066–0261). 

82See, e.g., Bipartisan House Comment (FMC– 

2022–0066–0279); T.G. Logistics, Inc. (FMC–2022– 

0066–0253); Retail Industry Leaders Association 

(FMC–2022–0066–0259); Meat Import Council of 

America, Inc./North American Meat Institute 

(FMC–2022–0066–0188); RPM Courier Systems 

(FMC–2022–0066–0120); Monica Rivera Beattie’s 

Trucking Group (FMC–2022–0066–0115); Monk 

Transportation Ltd. (FMC–2022–0066–0117); 

Pacifica Trucks, LLC (FMC–2022–0066–0118); 

Harbor Freight Transport Corp. (FMC–2022–0066– 

0123); BBT Logistics, Inc. (FMC–2022–0066–0127); 

Golden State Logistics (FMC–2022–0066–0158); 

Dependable Highway Express (FMC–2022–0066– 

0164); Impact Transportation (FMC–2022–0066– 

0172); Tricon Transportation, Inc. (FMC–2022– 

0166–0174); RANTA Transport LLC (FMC–2022– 

0066–0175); Bridgeside Incorporated (FMC–2022– 

0066–0179); RED Trucking agents for Cowan 

Systems LLC (FMC–2022–0066–0181); FOX 

Intermodal Corp. (FMC–2022–0066–0185); Pacific 

Coast Container Inc. (FMC–2022–0066–0194); 

Bonelli Logistics, Inc. (FMC–2022–0066–0196); 

DELKA Trucking, Inc. (FMC–2022–0066–0221); A1 

Dedicated Transport, LLC (FMC–2022–0066–0232); 

Mutual Express Company (FMC–2022–0066–0243); 

Dray Trucking, LLC (FMC–2022–0066–0258). 

Several commenters highlighted the importance of 

prohibiting common carriers from invoicing parties. 

83American Chemistry Council (FMC–2022– 

0066–0184). 

84See, e.g., Eagle Systems, Inc. (FMC–2022– 

0066–0203); Association of Bi-State Motor Carriers 

(FMC–2022–0066–0212); Harbor Trucking 

Association (FMC–2022–0066–0090). 

85Agriculture Transportation Coalition (FMC– 

2022–0066–0275). 

86 Id. 

87Excargo Services Inc. (FMC–2022–0066–0151). 

88Reliable Transportation Specialist, Inc. (FMC– 

2022–0066–0214). 

89Association of Bi-State Motor Carriers (FMC– 

2022–0066–0212); Agriculture Transportation 

Coalition (FMC–2022–0066–0275); Intransit 

Container, Inc. (FMC–2022–0066–0227); Best 

Transportation (FMC–2022–0066–0090). 

90Association of Bi-State Motor Carriers (FMC– 

2022–0066–0212). 

91Andale Trucking (FMC–2022–0066–0146). 

92See, e.g., Cloud Trucking Inc. (FMC–2022– 

0066–0105). 

‘‘related to the use of marine terminal 

space.’’ 78

FMC response: The Commission 

declines to make these changes. As 

noted in Section I, regarding inland rail, 

the Commission has jurisdiction over 

cargo moved inland pursuant to a 

through bill of lading. This jurisdiction 

is clear pursuant to Norfolk Southern 

Railway Co. v. Kirby, 543 U.S. 14 (2004). 

As a result, the Commission does not 

see a need to add this language 

specifically into this regulation. In 

response to International Dairy Foods 

Association, the Commission notes that 

the common definition of ‘‘container 

dwell fees’’ is interchangeable with the 

definition of ‘‘detention and 

demurrage.’’ As a result, the 

Commission declines to add another 

provision stating that container dwell 

fees are included in the rule’s 

definition. 

4. Additional Comments 

(a) ‘‘Designated Agent’’ 

Issue: Two comments requested that 

the Commission define in § 541.3 the 

term ‘‘designed agent,’’ which was used 

in § 541.2 in the notice of proposed 

rulemaking.79

FMC response: The Commission has 

not incorporated this request into the 

final rule. The term ‘‘designated agent’’ 

does not appear in any of the final 

regulatory text and thus including the 

term would not be useful or appropriate. 

(b) ‘‘Billable party for origin 

demurrage’’, ‘‘Billable party for 

destination demurrage’’, and ‘‘Billable 

party for detention’’ 

Issue: One commenter requested that 

the terms ‘‘billable party for origin 

demurrage’’, ‘‘billable party for 

destination demurrage’’, and ‘‘billable 

party for detention’’ be added to § 541.3 

to ‘‘[define] the appropriately billable 

parties’’ associated with demurrage and 

detention charges.80

FMC response: The Commission 

declines to make the proposed 

insertions. Just as the Commission 

determined not to split ‘‘demurrage and 

detention’’ into separate terms because 

the rule treats both charges equally, we 

also decline further delineations for 

origin demurrage, destination 

demurrage, and detention. The 

delineations are not required for the 

purposes of this rule. 

D. § 541.4 Properly Issued Invoices 

The Commission received many 

comments on proposed § 541.4, the 

‘‘Properly Issued Invoice’’ provision. 

The majority of commenters, especially 

motor carriers and shippers, expressed 

support for the proposed rule. One 

commenter characterized this proposed 

provision as ‘‘critical to accomplishing 

the Commission’s objective in the 

rulemaking.’’ 81

Many commenters that supported the 

proposed provision noted that third 

parties do not have a contractual 

relationship with the ocean carrier.82

Accordingly, it would be difficult for 

such third parties to dispute demurrage 

or detention invoices because they are 

not aware of the terms of the contract 

under which the container was shipped. 

Instead, commenters observed that the 

person that contracted for the carriage of 

goods or space to store cargo had the 

most knowledge about the shipment and 

are in the best position to understand 

the shipment invoice and to dispute the 

invoice if needed.83 In addition, 

requiring that the billing party only 

invoice the person that contracted for 

carriage or storage of goods affirms that 

both the billing party and the billed 

party know the terms and conditions 

under which demurrage or detention 

may be charged. 

Furthermore, several commenters 

asserted that because there is a 

contractual relationship between the 

billing and billed parties, there would 

be a greater incentive to provide timely 

and accurate invoices as well as a 

greater willingness to resolve 

disputes.84

Commenters stated that ‘‘parties who 

are not party to the ocean transportation 

contract and had no financial interests 

in the cargo itself, should not be 

subjected to detention [or] demurrage 

invoices.’’ 85 Commenters asserted that 

without a contractual relationship, third 

parties have little commercial leverage 

to dispute charges imposed upon them 

by common carriers.86

Additionally, several commenters 

noted that the proposed provision 

would improve the current demurrage 

and detention billing process because 

the invoice would be sent to the person 

with the most knowledge of the terms of 

the contract.87 Because the invoice is 

going to the party who has this 

knowledge, one commenter asserted 

that this will streamline the entire 

billing process, reduce costs, and 

increase efficiency to the supply 

chain.88

Motor carriers and motor carrier trade 

organizations detailed several issues 

with the current system. For example, 

motor carriers frequently find 

themselves locked out from marine 

terminals for failure to pay detention 

charges as the motor carriers wait to 

receive payment from their customers.89

Essentially, under the current system, 

motor carriers, who are threatened with 

being locked out of terminals, can be 

trapped in situations where they have 

no contractual leverage or negotiating 

power to fight back.90 Such commenters 

stated that the current system does not 

adequately protect motor carriers from 

unfair billing practices.91 In addition, 

motor carrier and motor carrier trade 

organizations frequently stated that the 

party responsible for demurrage or 

detention charges is simply not them.92

In addition, the proposed provision 

would reduce confusion with who is 

responsible for paying the invoice 

because it prohibits the billing party 

from invoicing more than one party. 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14339 

93FMC–2022–0066–0201. 

94FMC–2022–0066–0231. 

95FMC–2022–0066–0240. 

96 85 FR 29638, 29652. 

97FMC–2022–0066–0230. 

98 ‘‘Service Contract’’ is defined at 46 U.S.C. 

40102(21). 

99FMC–2022–0066–0180. 

100FMC–2022–0066–0160. 

101TraPac (FMC–2022–0066–0136); Fenix Marine 

Services (FMC–2022–0066–0186); West Coast MTO 

Agreement (FMC–2022–0066–0229). Furthermore, 

‘‘schedule’’ is defined by FMC regulations at 46 

CFR 525.1(c)(17). 

102See, e.g., Norfolk Southern Railway Co. v. 

Kirby, 543 U.S. 14, 16 (2004) (‘‘[C]ontracts for 

carriage of goods by sea must be construed like any 

other contracts: by their terms and consistent with 

the intent of the parties’’); Contract, Black’s Law 

Dictionary (11th ed. 2019). 

103E.g., Norfolk Southern Railway Co. v. Kirby, 

543 U.S. 14 (2004). 

Although many commenters 

supported proposed § 541.4, a few 

commenters, especially ocean common 

carriers and MTOs, expressed concerns 

with the proposed regulation. 

1. Alternative Approaches 

Issue: A few commenters expressed 

concern with the Commission’s 

analytical approach to the rule—using 

contractual relationships as the basis for 

establishing to whom demurrage and 

detention invoices should be sent. For 

example, Dole Ocean Cargo Express 

urged the Commission not to adopt a 

rule that ‘‘categorically limits the 

entities to which ocean carriers may bill 

detention and/or demurrage charges.’’ 93

NITL recommended that instead of a 

contractual relationship-based 

approach, the Commission’s rule should 

instead focus on which party ‘‘is best 

able to comply with a carrier’s 

reasonable demurrage and detention 

rules, except when an alternative party 

requests and assumes this responsibility 

in a written agreement with the carrier 

other than the bill of lading contract.’’ 

On the opposite end of the spectrum, 

the National Retail Federation said that 

instead the Commission should provide 

clear rules for who can be billed for 

detention or demurrage and provided 

example language based on who, in 

their opinion has influence over 

occurrences of these charges.94 HapagLloyd (America) LLC said that the rule’s 

prohibition on issuing an invoice to any 

other person than the person for whose 

account the billing party provided ocean 

transportation or storage would slow 

down the release of cargo and 

complicate the process of properly 

assessing the lawfulness of a charge, 

particularly in the case of overseas 

shippers, and thus would not support 

cargo fluidity.95

FMC response: After careful analysis, 

the Commission has determined that 

prohibiting billing parties from issuing 

demurrage and detention invoices to 

persons with whom they do not have a 

contractual relationship will best benefit 

the supply chain. If the billed party has 

firsthand knowledge of the terms of its 

contract, then they are in a better 

position to ensure that both they and the 

billing party are abiding by those terms. 

Although other parties may in some 

circumstances have more influence on 

whether demurrage or detention 

actually accrues, they are not the best 

party to understand the terms of the 

contract and dispute any charges. While 

there are benefits to bright-line rules 

such as the one suggested by the 

National Retail Federation, there are 

drawbacks as well. For example, the 

National Retail Federation’s specific 

suggestion that drayage motor carriers 

potentially be the responsible billed 

party under certain conditions fails to 

account for situations where a motor 

carrier’s delay is the result of no action 

of their own, but rather the result of the 

actions of others, such as MTOs 

cancelling appointments with little to 

no notice to the motor carrier. The 

Commission understands that some 

regulated parties will need to change 

their business practices in order to 

comply with this rule. 

Finally, the Commission does not 

believe that shippers located outside of 

the United States will serve as a basis 

of significant delay in the movement of 

cargo. As discussed in the preamble to 

the Interpretive Rule, shippers have 

commercial incentives to get their cargo 

off terminal, and modern digital 

Information Technology systems allow 

for prompt communications between 

parties, regardless of potential vast 

geographical distances.96

2. Meaning of ‘‘Contracted With’’ 

Issue: The Commission received 

several comments requesting 

clarification about the proposed 

requirement that the party ‘‘must have 

contracted’’ for the carriage or storage of 

goods. BassTech International LLC 

asked if, given that both the shipper and 

the consignee are parties to the bill of 

lading (which is the contract of 

carriage), this meets the Commission’s 

intended criteria.97 BassTech also asked 

whether, alternatively, the regulatory 

language is meant to limit invoicing to 

a party that has entered into a Service 

Contract with the ocean carrier for the 

transportation of the cargo.98 The 

National Customs Brokers & Forwarders 

Association of America, Inc. requested 

guidance on whether a consignee may 

be considered to have a contract with a 

common carrier when listed on a bill of 

lading.99 Other comments on this issue 

raised questions about implied 

contracts. The Shippers Coalition was 

concerned about implied contracts 

being used as the basis for an invoice 

and suggested that the Commission 

require in the regulation that these 

contracts be in writing.100 Finally, 

several MTOs requested clarification or 

acknowledgement by the Commission 

about their right to enforce a published 

Terminal Schedule as an implied 

contract against a BCO or trucker that 

enters the terminal.101

FMC response: ‘‘Contract’’ in this rule 

has its normal and ordinary legal 

meaning.102 This can be reflected in a 

document such as a contract of 

affreightment, for example, or a bill of 

lading, which courts have held to be 

maritime contracts.103 Because contracts 

(other than contracts implied by law) 

require a meeting of the minds, merely 

listing a party on a bill of lading, or 

other shipping transportation document, 

is not sufficient for them to become a 

billed party for purposes of part 541 if 

they played no role in contracting for 

the transportation of the cargo. Whether 

a meeting of the minds has occurred is 

something that can vary based on the 

specific circumstances of a given 

relationship. Because a contract can 

exist even if not memorialized in 

writing, the Commission declines to add 

a requirement that contracts need to be 

in writing for purposes of this rule. The 

Commission notes, however, that 

written contracts can provide important 

documentary evidence of agreement. In 

addition, the Commission notes that the 

term ‘‘contracts’’ for the purposes of 

§ 541.4 is not limited to service 

contracts; the term is broader given its 

normal and ordinary legal meaning and 

a contractual relationship can exist 

without a written document or specific 

form. 

This rule does not prohibit or 

otherwise limit an MTO from 

maintaining the practice of issuing any 

party—including BCOs or Motor 

Carriers—an invoice based on a 

Terminal Schedule, including charges 

for detention or demurrage, if the 

Terminal Schedule includes such 

charges and the Schedule has been 

made available in accordance with 46 

CFR 525.3. In fact, the practice of 

issuing invoices based on a Terminal 

Schedule that includes those charges 

continue to be permissible if they are 

just and reasonable as stated in 46 CFR 

545.4. The consistent application of the 

Terminal Schedule charges to various 

customers is likely to be done on a 

normal, customary, and continuous 


khammond on DSKJM1Z7X2PROD with RULES3
14340 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

104E.g., 87 FR 62341, 62347. 

105FMC Order of Investigation, Fact Finding 

Investigation No. 28, 2 (2018). The Order of 

Investigation and other materials related to Fact 

Finding 28 are available on the Commission’s 

website at https://www.fmc.gov/fact-finding-28/. 

106 87 FR 62341, 62349–62350. 

107Meat Import Council of America, Inc./North 

American Meat Institute (FMC–2022–0066–0188); 

International Association of Movers (FMC–2022– 

0066–0222); and Consumer Technology Association 

(FMC–2022–0066–0228). 

108 International Association of Movers (FMC– 

2022–0066–0222). 

109Consumer Technology Association (FMC– 

2022–0066–0228). 

110 International Tank Container Organisation 

(FMC–2022–0066–0096); Flexport, Inc. (FMC– 

2022–0066–0111). 

111FMC–2022–0066–0096. 

112 INTERCOMS (International Commercial 

Terms) are a set of standardized trade terms 

published by the International Chamber of 

Commerce (ICC) that are commonly used in 

international trade contracts. 

113Shippers Coalition (FMC–2022–0066–0160); 

FedEx Trade Networks Transport & Brokerage, Inc. 

(FMC–2022–0066–0165); American Association of 

Exporters and Importers (FMC–2022–0066–0168); 

National Customs Brokers & Forwarders 

Association of America, Inc. (FMC–2022–0066– 

0180); SM Line Corp. (FMC–2022–0066–0182); 

American Chemistry Council (FMC–2022–0066– 

0184); International Housewares Association (FMC– 

2022–0066–0187); A Customs Brokerage, Inc. 

(FMC–2022–0066–0200); Dole Ocean Cargo Express 

(FMC–2022–0066–0201) (would prefer no limits on 

who an invoice could be issued to but included 

statements that a consignee is sometimes the proper 

person to be billed); National Association of 

Chemical Distributors (FMC–2022–0066–0208); 

Metro Group Maritime (FMC–2022–0066–0209); 

Consumer Brands Association (FMC–2022–0066– 

0210); CV International (FMC–2022–0066–0217); 

Seafrigo USA Inc. (FMC–2022–0066–0223); West 

Coast MTO (FMC–2022–0066–0229); Bass Tech 

International LLC (FMC–2022–0066–0230); 

National Retail Federation (FMC–2022–0066–0231); 

Pacific Merchant Shipping Association (FMC– 

2022–0066–0233); Connection Chemical LP (FMC– 

2022–0066–0236); World Shipping Council (FMC– 

2022–0066–0242); Husky Terminal and Stevedoring 

LLC (FMC–2022–0066–0248); New York New Jersey 

Foreign Freight Forwarders and Brokers 

Association, Inc. (FMC–2022–0066–0247); Ocean 

Carrier Equipment Management Association, Inc. 

(FMC–2022–0066–0257); Cheese Importers 

Association of America (FMC–2022–0066–0265). 

114FMC–2022–0066–0182. 

115Shippers Coalition (FMC–2022–0066–0160); 

National Association of Exporters and Importers 

(FMC–2022–0066–0168). 

basis, meeting that crucial element of 

the interpretive rule. Also, as noted by 

commenters, 46 U.S.C. 40501(f) and 46 

CFR 525.2(a)(2) establish that such 

Schedules are enforceable as implied 

contracts. Under such a scenario, a 

Motor Carrier has a contractual 

relationship with the MTO and the 

terms of the contract (the Schedule) are 

known to the Motor Carrier in advance 

by operation of 46 CFR 523.3. This is a 

very different situation than where a 

Motor Carrier is billed for demurrage or 

detention and the Motor Carrier has no 

contractual relationship with the billing 

party and is not privy to the specifics of 

the contractual agreement (such as 

where a Motor Carrier is billed 

demurrage or detention based on an 

agreement between a shipper and a 

billing party). 

This rule does require that when an 

MTO issues a bill for demurrage or 

detention for purposes of enforcing a 

Terminal Schedule, the billing must 

comply with part 541, including 

providing all the information required 

by § 541.6. The Commission recognizes 

that this may require MTOs to revise 

their current business practices. The 

Commission’s primary concern with 

this rule is to ensure that billed parties 

understand the demurrage or detention 

invoices they receive.104 Additional 

burdens on MTOs to be able to provide 

the necessary data, which the 

Commission does not believe to be 

unduly burdensome, is outweighed by 

the benefits of transparency, which will 

allow billed parties to verify the 

accuracy of demurrage and detention 

charges and with whom the charges 

originate (for example, the MTO itself or 

the VOCC). As discussed in the 

Commission’s Order of Investigation for 

Fact Finding Investigation No. 28, the 

lack of visibility surrounding current 

MTO demurrage and detention billing 

practices ‘‘have raised questions over 

whether the current practices allow for 

a competitive and reliable American 

freight delivery system.’’ 105

3. Consignees 

Issue: Noting 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, the Commission sought 

comments in the NPRM on whether it 

would be appropriate to also include the 

consignee named on the bill of lading as 

another person who may receive a 

demurrage or detention invoice, thus 

allowing the common carrier to bill 

either the person who contracted for the 

shipment of the cargo or consignee 

named on the bill of lading.106 The 

Commission received 29 comments in 

response. Three comments said that 

invoices should be sent to contractual 

parties only.107 These commenters said 

consignees were not the party 

responsible for payment,108 or that 

consignees typically do not have enough 

knowledge to determine whether the 

billing information is consistent with 

the terms of the underlying contract.109

Two comments said that invoices 

should be sent only to consignees.110

The International Tank Container 

Organisation (ITCO) opposed allowing 

charges to be sent back to the shipper, 

saying that it would ‘‘further complicate 

an already complex supply chain and 

hinder both efficient operations and 

global trade.’’ 111 ITCO asserted doing so 

ignores the INTERCOMS understanding 

and will put the United States in 

conflict with international trading 

terms.112

The vast majority of comments (24), 

however, were of the opinion that the 

rule should make allowances for 

sending invoices to the shipper or the 

consignee (in at least some 

scenarios).113 Comments that supported 

allowing invoices to be sent to 

consignees generally said that 

consignees should be included because: 

(1) consignees are frequently the party 

best situated to mitigate against the 

accrual of demurrage and detention 

charges and (2) consignees frequently 

have the most knowledge about a 

shipment and therefore best able to 

dispute any charges. A few supporters 

put qualifiers on when they thought 

consignees should be allowed to be 

invoiced. For example, SM Line said 

that consignees should be included as a 

potential party to be billed but that the 

Commission should not limit billed 

parties according to how, and whether 

the party appears on a specific bill of 

lading.114 In contrast, Shippers 

Coalition and the American Association 

of Exporters and Importers said that 

consignees should only be allowed to be 

invoiced if there is an advance written 

agreement between the carrier and 

consignee to do so.115

FMC response: In light of these 

comments, the Commission has made 

changes to this final rule to allow 

consignees to be billed as an alternative 

to the shipper when the consignee is the 

party contracting for the shipping and is 

therefore in contractual privity with the 

carrier. The Commission does not adopt 

the concept in the proposed rule’s 

preamble that consignees should be 

required to be listed on the bill of lading 

in order to be billed. Rather, it is the 

consignee’s contractual privity with the 

shipper that determines whether the 

consignee can be billed. Merely listing 

the consignee on the bill of lading is not 

sufficient to support billing the 

consignee. (Conversely, although 

presumably a less common scenario, it 

is possible to properly issue an invoice 

to a consignee that has not been listed 

on the bill of lading.) Corresponding to 

the changes in § 541.4 which allow 

consignees to be billed, the Commission 

has also added a definition of 

‘‘consignee’’ to § 541.3. This definition 

comports with the definition of 

‘‘consignee’’ that appears in § 520.2 so 

as to align this definition with the rest 

of the CFR, while containing language 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14341 

116FedEx Trade Networks Transport & Brokerage, 

Inc (FMC–2022–0066–0165); Pacific Coast Council 

of Customs Brokers and Freight Forwarders 

Association (FMC–2022–0066–0224); John S. 

Connor, Inc. (FMC–2022–0066–0267); and 

Agriculture Transportation Coalition (FMC–2022– 

0066–0275). 

117New York New Jersey Foreign Freight 

Forwarders & Brokers Association, Inc. (FMC– 

2022–0066–0247); CV International, Inc. (FMC– 

2022–0066–0217); National Customs Brokers & 

Forwarders Association of America, Inc. (FMC– 

2022–0066–0180); FedEx Trade Networks Transport 

& Brokerage, Inc. (FMC–2022–0066–0165). 

118FMC–2022–0066–0165. 

119E.g., National Association of Waterfront 

Employers (FMC–2022–0066–0276); Ports America/ 

SSA Marine (FMC–2022–0066–0249); Port Houston 

(FMC–2022–0066–0268). 

120FMC–2022–0066–0202. 

that further clarifies the consignee’s 

place in the chain of shipping 

transactions for purposes of demurrage 

and detention billing practices. As such, 

and consistent with the comments, the 

rule finds a middle ground between 

acknowledging that a consignee may be 

the correctly billed party in some cases, 

but not all. The Commission 

encourages, but is not requiring, 

advance written agreements between 

carriers and consignees regarding 

demurrage and detention billing. 

4. Payment by Third Parties Generally 

Issue: The Commission received four 

comments regarding allowing payment 

of invoices by third parties.116 The 

Agriculture Transportation Coalition 

and Pacific Coast Council of Customs 

Brokers and Freight Forwarders 

Association requested that the rule 

include a clear mandate that the 

delegation payment authority is allowed 

but must be based on actual acceptance 

of such responsibility by the third party, 

such as a written or digital signature 

evidencing acceptance. FedEx Trade 

Networks and John S. Connor, Inc. 

requested that the rule specify that third 

parties may only receive copies of 

invoices and pay them with the billed 

party’s knowledge and consent (but did 

not say that such consent should be 

required to be in writing). FedEx Trade 

Networks and John S. Connor, Inc. also 

requested that the regulation contain an 

explicit statement that if a third party 

receives a copy of the invoice that the 

third party itself is not accountable for 

the payment. 

FMC response: The Commission does 

not believe that the suggested changes 

are necessary. The rule is clear in its 

direction that, with a limited exception 

for consignees, demurrage and detention 

invoices must be issued to the person 

for whose account the billing party 

provided ocean transportation or storage 

and who contracted with the billing 

party for the carriage or storage of goods. 

This will often, but not always, be the 

shipper of record. Outside of the 

exception for consignees, billing parties 

must not send invoices to third parties. 

The rule only mandates to whom the 

invoice can be issued and therefore who 

has legal liability to pay it. It is 

purposefully silent on third parties 

voluntarily paying an invoice—thus 

allowing the practice by declining to 

prohibit it. The Commission does not 

believe it is necessary to require such 

agreements to be in writing or otherwise 

memorialized between the billed party 

and the third party. The Commission 

does not believe it is the agency’s place 

to dictate a third party’s business 

liability decision in this scenario. A 

third party will either: (1) pay the 

invoice on behalf of the billed party 

based on a previous guarantee by the 

billed party that they will be 

reimbursed; or (2) pay the invoice 

without such an agreement in place and 

assume the risk that they potentially 

may not be reimbursed. 

E. § 541.5 Failure To Include Required 

Information 

1. Invoice Attachments 

Issue: Four commenters requested 

clarification whether a billing party may 

provide the required data elements as an 

attachment, addendum, additional 

pages, etc. to their invoice, for reasons 

of convenience or necessity because of 

the invoice’s length.117 FedEx Trade 

Networks asserted that when an NVOCC 

is merely passing through the VOCC’s 

charges, it should be able to satisfy the 

requirements by attaching the ocean 

carrier’s invoice.118

FMC response: The required 

information may be included as an 

attachment to the invoice, as the statute 

simply requires that invoices ‘‘include’’ 

this information. In addition, § 541.6 

states that an invoice must ‘‘contain’’ 

that information. As such, it is the 

Commission’s position that this 

information may be included as an 

attachment, or otherwise incorporated. 

An NVOCC passing through VOCC 

demurrage or detention charges can 

satisfy the requirements by merely 

attaching the ocean carrier’s invoice if 

that invoice contains all the necessary 

information in § 541.6. If all the 

necessary information is not on the 

ocean carrier’s invoice, the NVOCC 

must locate and amend the missing 

information prior to sending the invoice 

on. 

2. Voiding of Invoice Too Extreme a 

Penalty 

A few commenters asserted that the 

penalty of having a billed party not be 

required to pay an invoice if the invoice 

was not compliant is an extreme penalty 

for a single violation.119 The National 

Association of Waterfront Employers 

(NAWE) additionally argued that such a 

stringent penalty is not consistent with 

the Commission’s Interpretive Rule on 

46 CFR 545.4, which requires more than 

a single instance to something that 

happens on a ‘‘normal, customary, and 

continuous basis.’’ 120

FMC response: The elimination of the 

billed party’s obligation to pay an 

invoice that lacks the required 

information is statutorily mandated 

under 46 U.S.C. 41104(f) for common 

carriers. As such, 46 CFR 541.5 merely 

states what the statute already requires 

and the Commission lacks discretion to 

eliminate or relax this requirement. 

Section 41104(f) does allow the 

elimination of payment obligation for 

‘‘an invoice’’ that does not meet the 

contents of the invoice requirements. 

This language signals Congress’ desire 

to not require that a common carrier 

repeat the error multiple instances for a 

shipper to be able to seek relief. Thus, 

in the demurrage and detention context, 

the statutory language of section 

41104(f) is clear and unambiguous in 

requiring only a single instance to 

trigger the elimination of the obligation 

to pay the inaccurate invoice and 

supersedes the ‘‘more than one 

instance’’ interpretation of the ‘‘normal, 

customary, and continuous basis’’ 

language found in 46 CFR 545.4. 

Similarly, pursuant to 46 U.S.C. 

41102(c), it is a prohibited practice for 

an MTO to fail to include the required 

minimum information in a demurrage 

and detention invoice sent to a party 

other than a VOCC. Sending incomplete 

bills that do not contain sufficient 

information for shippers to verify if the 

bills received are accurate would not 

constitute having just and reasonable 

practices relating to or connected with 

receiving, handling, storing or 

delivering property. Extending the 

elimination of charge obligations 

provision at 46 U.S.C. 41104(f) to MTOs 

issuing demurrage and detention 

invoices would meet the statutory 

direction that the Commission must 

‘‘further define prohibited practices by 

. . . marine terminal operators, . . . 

under section 41102(c) of title 46, 

United States Code, regarding the 

assessment of demurrage or detention 

charges’’ and ensure that all demurrage 

and detention bills sent to billed parties 

provide the necessary information for 

the bills to be paid or disputed quickly 


khammond on DSKJM1Z7X2PROD with RULES3
14342 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

121TraPac, LLC (FMC–2022–0066–0136); Fenix 

Marine Services (FMC–2022–0066–0186); West 

Coast MTO Agreement (FMC–2022–0066–0229); 

National Association of Waterfront Employers 

(FMC–2022–0066–0276); Pacific Merchant 

Shipping Association (FMC–2022–0066–0233); 

Husky Terminal and Stevedoring, LLC (FMC–2022– 

0066–0248); Port Houston (FMC–2022–0066–0268). 

122 87 FR 62341, 62350 (Oct. 14, 2022). 123FMC–2022–0066–0247. 

124National Customs Brokers & Forwarders 

Association of America, Inc. (FMC–2022–0066– 

0180); Mediterranean Shipping Company (FMC– 

2022–0066–0143); FedEx Trade Networks Transport 

& Brokerage, Inc. (FMC–2022–0066–0165); U.S. 

Dairy Export Council/National Milk Producers 

Federation (FMC–2022–0066–0235). 

125FMC–2022–0066–0143. 

126FMC–2022–0066–0274. 

thereby ensuring efficiency across the 

shipping system. Having the invoice 

content and elimination of charge 

obligations requirements for all billing 

parties be the same throughout the 

industry will ensure that there is more 

clarity and accuracy in invoicing 

throughout the shipping system. 

F. § 541.6 Contents of Invoice 

1. § 541.6(a), Identifying Information 

(a) § 541.6(a)(1), Bill of Lading and 

§ 541.6(a)(2), Container Number 

Issue: The Commission did not 

receive any comments directly 

addressing the requirement that the 

invoice must list the container 

number—presumably because this is a 

data element listed in OSRA 2022. A 

few commenters, however, raised 

concerns that requiring the bill of lading 

number, especially in conjunction with 

the container number, would increase 

the risk of theft of the cargo and create 

security risks by allowing for false pickup appointments.121 Some of these 

comments further asserted that 

requiring bill of lading information to be 

included on the invoice would require 

significant and costly upgrades to their 

IT systems. 

FMC response: The Commission 

disagrees with the commenters’ 

assertion regarding potential security 

issues. The Commission previously 

addressed this concern when the issue 

was raised by the Ocean Carrier 

Equipment Management Association 

(OCEMA) in response to the ANPRM.122

Here, we reiterate and expand upon that 

response. Bill of lading numbers are 

available through publicly accessible 

import and export data systems, such as 

the Journal of Commerce’s Port Import/ 

Export Reporting Services (PIERS) and 

are already frequently included on 

demurrage and detention invoices. 

Because bill of lading numbers are not 

confidential information, they are not a 

good basis for security measures. 

Container numbers are not protected 

information either. Container numbers 

are written on the outside of the 

container. Thus, like bill of lading 

numbers, they are not a good basis for 

security measures. Including an already 

publicly available number on an invoice 

does not increase security concerns. The 

commenters’ claims also do not 

consider the multiple levels of security 

at the port that deter an incorrect party 

from taking the cargo. These security 

measures include basic security 

infrastructure such as perimeter fencing, 

security gates, monitoring equipment, 

and alarm systems, and other access 

control measures such as Port Security 

Plans and Transportation Worker 

Identification Credential (‘‘TWIC’’) 

requirements. Nor do their comments 

consider that the rule prohibits 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. 

The bill of lading number and 

container number provide valuable 

identifying information to the billed 

party such as determining which 

shipment is being charged and a means 

of verifying accuracy of charges. 

Therefore, the Commission is retaining 

the requirement that this information be 

included on the invoice. The 

Commission recognizes that some 

billing parties may need to revise 

operations, including software and 

website updates, such as those related to 

how they generate cargo pick-up 

numbers. However, the Commission has 

no evidence to support a finding nor 

received data from commenters showing 

that such revisions would be time 

intensive or costly. Billing parties could, 

for example, for minimal time and cost, 

replace that portion of a pick-up number 

currently based on bill of lading 

number/container number with a 

number produced by a random number 

generator and doing so would be more 

secure than current systems that 

incorporate bill of lading numbers/ 

container numbers into the pick-up 

number. 

(b) § 541.6(a)(3), Port(s) of Discharge 

Issue: New York New Jersey Foreign 

Freight Forwarders and Brokers 

Association requested the Commission 

amend § 541.6(a)(3) to clarify that the 

port of discharge can be any U.S. port— 

ocean or interior—to address situations, 

for example, where cargo arrives at a 

West or East Coast port, or via Canada, 

and then moves by rail to the interior.123

The commenter was concerned that 

without the suggested clarification to 

the regulation there is the risk that the 

billed party would not receive the 

proper billing information to assess the 

correctness of invoices issued for 

charges incurred at interior ports. 

FMC response: The commenter is 

correct that detention or demurrage 

invoices issued for cargo delivered on a 

through bill of lading under the 

Commission’s jurisdiction are required 

under this rule to list all ports of 

discharge, ocean and inland. The 

Commission believes that this 

requirement is sufficiently incorporated 

into the language we proposed in the 

NRPM and have adopted in this final 

rule. The regulation’s use of ‘‘port(s),’’ 

as opposed to ‘‘port’’ accounts for 

situations where there are multiple 

ports of discharge. 

(c) § 541.6(a)(4), Basis for Why the 

Billed Party Is the Proper Party of 

Interest 

Issue: The Commission received 

several requests from commenters to 

clarify what level of detail is necessary 

to satisfy the requirement that the 

invoice include the basis for why billed 

party is the proper party of interest and 

thus liable for the charge.124

Mediterranean Shipping Company 

specifically requested guidance as to 

whether the requirement would be 

satisfied with: (1) a reference to the 

applicable tariff rule supporting the 

billing; (2) specific reference needed to 

contractual provisions; or (3) a reference 

number to identify the contract at 

issue.125

FMC response: There is no specific or 

set of specific documents or reference(s) 

that would meet the requirement of 

§ 541.6(a)(4). The purpose of the 

regulation is that billed parties must be 

able to identify why the billing party 

believes that they are responsible for 

paying the invoice and to refute that 

basis if they believe that they have been 

billed incorrectly. A reference to the 

applicable tariff rule supporting the 

billing, specific reference to contractual 

provisions, or a reference number to 

identify the contract at issue might all, 

or might all not, meet this standard 

depending on the specific 

circumstances of a particular invoice. 

(d) Requests for Additional Identifying 

Information 

Issue: The U.S. Department of 

Agriculture requested that the 

Commission also require billing parties 

include on the invoice transportation 

history information, such the date and 

time a container was loaded on or off a 

vessel, and the date and time the vessel 

left or arrived at the port.126 The Meat 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14343 

127FMC–2022–0066–0188. 

128FMC–2022–0066–0168. 

129FMC–2022–0066–0180. 

130FMC–2022–0066–0217. 

131FMC–2022–0066–0247. 

132FMC–2022–0066–0267. 

133FMC–2022–0066–0277. 

134FMC–2022–0066–0223. 

135FMC–2022–0066–0188. 

136FMC–2022–0066–0274. 

137FMC–2022–0066–0186. 

138FedEx Trade Networks Transport & Brokerage, 

Inc. (FMC–2022–0066–0165). 

139See 85 FR 29638, 29654. 

140Seafrigo USA (FMC–2022–0066–0223); DHL 

Global Forwarding (FMC–2022–0066–0219). 

141Seafrigo USA (FMC–2022–0066–0223). 

142 International Tank Container Organisation 

(FMC–2022–0066–0096). 

Import Council of America, Inc. (MICA) 

and the North American Meat Institute 

proposed that the Commission should 

require billing parties to identify on the 

invoice the vessel(s) used to transport 

the cargo.127 These commenters believe 

that these additional data elements on 

the invoice would increase transparency 

and help billed parties in verifying 

calculations of free time, availability, 

and earliest-return-date, and thus make 

it easier to identify and dispute excess 

charges. 

FMC response: The Commission 

agrees that having this additional 

information may be helpful in some 

circumstances. The Commission, 

however, has not been presented with 

enough evidence to be convinced that 

the potential benefits to some billed 

parties on some invoices outweigh the 

burden to billing parties by requiring 

this information on all invoices. The 

Commission will continue to monitor 

detention and demurrage billing trends 

and retains the authority to revise nonstatutorily mandated detention and 

demurrage invoice data elements in the 

future if it determines there is a need to 

do so. 

(e) Billing Exceptions 

Issue: The American Association of 

Exporters and Importers (AAEI) 

supported § 541.6 and the required 

contents of the invoice.128 AAEI also 

stated that if demurrage and detention 

charges are incurred or removed due to 

terminal or vessel operating 

deficiencies, then the invoices should 

include the details with standardized 

categories of billing exceptions. 

FMC response: The Commission 

declines to add a requirement for billing 

exceptions to § 541.6. Under OSRA 

2022, the billing party has an obligation 

to ensure the accuracy of its invoices. In 

addition, § 541.8 specifies the 

procedures for disputing charges—these 

disputes can be initiated if the billed 

party feels they are not responsible for 

the charges. As a result, the Commission 

declines to proscribe that billing parties 

deduct certain charges, especially given 

that there could be disagreement over 

where the fault in the charges lies. 

2. § 541.6(b), Timing Information 

(a) § 541.6(b)(1), Invoice Date 

Issue: The National Customs Brokers 

& Forwarders Association of 

America,129 CV International,130 and 

New York New Jersey Foreign Freight 

Forwarders and Brokers Association, 

Inc.131 asked the Commission to clarify 

whether backdating of invoices is 

permissible under this rule, or whether 

the billing date on demurrage and 

detention invoices should reflect the 

actual date an invoice is mailed out or 

otherwise finalized. John S. Connor, Inc. 

agreed, saying that backdating is a 

common practice that must not be 

allowed.132 National Industrial 

Transportation League raised related 

concerns about some carriers continuing 

to assess charges during the time spent 

to process payments after payment has 

been made by the billed party or its 

agent.133

FMC response: Billing parties have an 

obligation under 46 U.S.C. 41104(d)(2) 

to issue detention and demurrage 

invoices that contain accurate 

information concerning the statutorily 

specified data elements as well as any 

additional information determined 

necessary by the Commission. To 

solidify this point, the Commission has 

incorporated into § 541.6 the 

requirement for accurate information. 

Accuracy is an implied legal condition 

of any statutory or regulatory 

information collection imposed on 

regulated parties by Congress or 

agencies and is generally not 

specifically incorporated as a written 

requirement. However, based on these 

comments, it appears that such 

clarification in the regulatory text may 

be of use to regulated parties and its 

incorporation mirrors the use of the 

word in 46 U.S.C. 41104(d). 

(b) § 541.6(b)(2), Invoice Due Date 

Issue: Seafrigo USA urged the 

Commission to clarify the meaning of 

‘‘billing due date,’’ and specifically 

asked whether it means the payment 

due date.134 The Meat Import Council of 

America, Inc. and the North American 

Meat Institute, in a joint comment, 

suggested that billing parties must be 

prohibited from listing the payment due 

date as the same date the invoice is 

issued as billed parties should have the 

full 30 days after an invoice is received, 

not simply issued.135 The U.S. 

Department of Agriculture 

recommended that the Commission 

specify in the regulation the timeframe 

for payment of an invoice, making 

certain that the regulation is clear that 

payment is not due until any disputes 

are resolved.136 Fenix Marine Services 

stated that the proposed demurrage and 

detention invoice requirements are 

incompatible with traditional MTO 

billing practices, and changing their 

practice to conform to the FMC’s rule 

would mean a major overhaul of many 

MTO’s longstanding billing practices.137

FMC response: The billing due date 

(or ‘‘invoice due date’’ as worded in this 

final rule) is the date by which the 

billed party must pay the invoiced 

charges. The Commission has revised 

§ 541.8(a) to make clear that billing 

parties must allow billed parties at least 

30 calendar days from the invoice 

issuance date to request mitigation, 

refund, or waiver of fees. 

Correspondingly, the due date of an 

invoice must be on or after 30 days after 

it is issued. As discussed in the NPRM 

and elsewhere in this document, the 

Commission acknowledges that this rule 

may require some billing parties to 

change their billing information 

technology systems and practices. 

(c) § 541.6(b)(3)–(5), Free Time 

Issue: One commenter requested that 

‘‘end of free time’’ in § 541.6(b)(5) be 

defined as ‘‘the end of free time as 

determined by the ocean common 

carrier or marine terminal, whichever, is 

later’’ because ocean common carriers 

and marine terminal may have disparate 

last free day dates.138

FMC response: The Commission 

declines to define ‘‘end of free time’’, 

‘‘start of free time’’, or ‘‘free time’’ as 

part of this rulemaking for the reason 

noted by the commenter—their meaning 

can vary terminal to terminal.139 The 

Commission does not have evidence at 

this time to support a finding that 

standardizing these terms is warranted. 

(d) § 541.6(b)(6), Container Availability 

Date 

Issue: Two NVOCCs requested 

clarification of the meaning of 

‘‘availability date’’ in § 541.6(b)(6).140

One of the commenters requested that 

FMC define the term in § 541.3.141 A 

third commenter said that the term 

‘‘availability date’’ creates too much 

ambiguity in that some shipments may 

be delayed in customs resulting from 

actions taken or not taken by the 

receivers and import customs 

brokers.142 They argued that vessel 

arrival date should be used instead 

because actual time of arrival of the 


khammond on DSKJM1Z7X2PROD with RULES3
14344 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

143 85 FR 29638, 29654 (May 18, 2020) (internal 

citation omitted). 

144 Id. 

145 84 FR 48850, 48852 (Sept. 17, 2019) (internal 

citation omitted). 

146FMC–2022–0066–0189. 

147FMC–2022–0066–0096. 

148FMC–2022–0066–0095. 

149FMC–2022–0066–0262. 

150FMC–2022–0066–0247. 

151FMC–2022–0066–0208. 

152FMC–2022–0066–0236. 

153FMC–2022–0066–0217. 

154FMC–2022–0066–0267. 

155FMC–2022–0066–0188. 

156FMC–2022–0066–0180. 

157 88 FR 55697, 55698 (Aug. 16, 2023) (Question 

6). 

158https://www.fmc.gov/commissioner-dyeproposes-reforms-to-international-ocean-supplychain-practices/ (July 26, 2023). 

159FMC–2022–0066–0136. 

160FMC–2022–0066–0228. 

161FMC–2022–0066–0230. 

vessel is clearly defined and gives 

NVOCCs a clear date from which to start 

the clock. 

FMC response: The Commission 

declines to incorporate the commenters’ 

suggestions. First, the date of container 

availability is statutorily mandated by 

46 U.S.C. 41104(d)(2)(A). Congressional 

action would be needed to change it to 

vessel arrival date. Second, the 

Commission declines to add a definition 

of ‘‘availability date’’ to § 541.3 for the 

same reason we declined to define it in 

our 2020 final Interpretive Rule on 

demurrage and detention— 

‘‘availability’’ can vary by port or 

marine terminal.143 As we discussed 

there: ‘‘Suffice it to say, availability at 

a minimum includes things such as the 

physical availability of a container: 

Whether it is discharged from the 

vessel, assigned a location, and in an 

open area (where applicable).’’ 144

Additionally, as discussed in the 

Interpretive Rule’s notice of proposed 

rulemaking: ‘‘In this context, ‘cargo 

availability’ or ‘accessibility’ refers to 

the actual ability of a cargo interest or 

trucker to retrieve its cargo. Cargo is not 

available, for instance, if a cargo interest 

or trucker cannot pick it up because it 

is in a closed area of a terminal, or if the 

port is closed.’’ 145 We adopt the 

meaning for these terms provided in the 

Interpretive Rule in this rule as well. 

(e) § 541.6(b)(7), Earliest Return Date 

A number of comments raised the 

issue of earliest return date. Intermodal 

Motor Carriers Conference urged the 

Commission to clarify OSRA 2022’s 

earliest return date, and to require that 

date on the detention and demurrage 

invoice.146 The International Tank 

Container Organisation (ITCO) noted 

that OSRA 2022 requires that the 

earliest return date be specified, while 

this rule does not require it on the 

invoice.147 ITCO opined that the term 

‘‘availability date,’’ which is currently 

used in the rule, creates too much 

ambiguity. Balsam Brands 148 and 

Harbor Trucking Association 149 said 

that the earliest return date should be 

listed for export shipments, and any 

modifications to this date should be 

identified. The New York New Jersey 

Foreign Freight Forwarders and Brokers 

Association, Inc. (NYNJFF&BA) stated 

that the requirement to provide the 

earliest return date for export shipment 

should be understood as meaning the 

first notice for receiving containers at 

ports, as this notice sets the rest of the 

process in motion for getting a container 

back on a vessel.150 NYNJFF&BA states 

that if demurrage and detention can be 

charged in instances when cargo 

remains at the terminal beyond the free 

time as a result of VOCC decisions, then 

there is no incentive to improve the 

information and receiving window dates 

in the early return date (ERD) notices. 

When containers are delivered per ERD 

notices, the cargo waiting for a new 

vessel cannot be incentivized by the 

imposition of demurrage and detention 

to reduce time at the terminal. 

To strengthen the rule’s requirements, 

the National Association of Chemical 

Distributors 151 and Connection 

Chemical 152 suggested that the 

Commission add the term ‘‘accurate’’ 

before the earliest return date, to ensure 

that any changes to this date are 

reflected as conditions change. CV 

International stated that earliest return 

dates change frequently because of 

unreliable vessel schedules and 

congested terminals.153 As a result, CV 

International suggested that when a 

container is in motion, the earliest 

advised return date should apply. John 

S. Connor, Inc. made similar 

comments.154

The Meat Import Council of America, 

Inc. (MICA) and the North American 

Meat Institute (NAMI) jointly argued 

that the final rule should not diminish 

the significance of intervening, clockstopping events when a billed party 

disputes the charges.155 MICA/NAMI 

suggests that the Commission requiring 

including earliest return date and 

changes to that date on detention and 

demurrage invoices would increase 

transparency and minimize billing 

disputes. Lastly, the National Customs 

Brokers and Forwarders Association of 

America requested clarification and 

Commission guidance on how billing 

parties should account for data elements 

in the minimum invoice information 

requirements where dates, such as the 

earliest return dates, change.156

FMC response: The Commission 

declines to make the commenters’ 

changes requested regarding earliest 

return date in this rule. This is an issue 

that the Commission will continue to 

examine. For example, the Commission 

issued a Request for Information in 

August 2023 seeking comments on what 

shippers and BCOs can do to better 

predict container earliest return 

dates.157

In addition, Commissioner Rebecca 

Dye has proposed to reform three 

practices of ocean carriers and marine 

terminal operators at the Ports of Los 

Angeles and Long Beach, and the Port 

of New York and New Jersey that relate 

to earliest return date, container returns, 

and container pickup (notice of 

availability).158 Commissioner Dye 

encourages reactions or questions 

regarding these proposals from the 

shipping public. More information on 

this project may be found on FMC’s 

website. 

(f) § 541.6(b)(8), Date(s) for Which 

Demurrage and/or Detention Were 

Charged 

Issue: TraPac LLC stated that 

requiring billing parties to include the 

specific dates on which demurrage or 

detention is charged would, for MTOs, 

result in an unnecessary burden on 

terminals as MTOs would need to 

develop a reporting system to provide 

information regarding the container’s 

status on a ‘‘clock start’’ and ‘‘clock 

stop’’ basis.159 According to the 

commenter: (1) it is not reasonable or 

realistic to expect MTOs to transmit 

information in real time; and (2) if not 

in real time, it could result in significant 

delay. Consumer Technology 

Association said that the Commission 

should require disclosure of any 

relevant ‘‘stop-the-clock’’ events that 

toll the passage of free time—such as 

container availability, facility closures, 

port congestion, or lack of available 

appointment slots. They said that 

having this information would greatly 

facilitate the timely resolution of 

disputes but noted that this information 

is often only available to billing 

parties.160 BassTech International LLC 

suggested that, for emphasis of the 

billing party’s obligation for the accurate 

assessment of charges, the Commission 

change ‘‘were charged’’ to ‘‘were 

incurred and charged.’’ 161

FMC response: As discussed in the 

NPRM, instead of requiring billing 

parties to identify specific ‘‘clockstopping’’ events on demurrage and 

detention invoices, this rule requires the 

billing parties to identify the specific 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14345 

162 87 FR 62341, 62351. 

163Anonymous (FMC–2022–0066–0093). 

164BassTech International LLC (FMC–2022– 

0066–0230). 

165Seafrigo USA Inc. (FMC–2022–0066–0223). 

166National Retail Federation (FMC–2022–0066– 

0231). 

167 International Tank Container Organisation 

(FMC–2022–0066–0096); International Dairy Foods 

Association (FMC–2022–0066–0244); and the Retail 

Industry Leaders Association (FMC–2022–0066– 

0259). 

168FMC–2022–0066–0244. 

169Meat Import Council of America, Inc. and the 

North American Meat Institute (FMC–2022–0066– 

0188); Tyson Foods Inc. (FMC–2022–0066–0225); 

and the Agriculture Transportation Coalition (FMC– 

2022–0066–0275). 

170FMC–2022–0066–0188. 

dates on which they charged demurrage 

or detention.162 The 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 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. 

(g) General Comments 

Issue: One commenter said that any 

schedule data on invoices must include 

all previous revisions and not only the 

final dates.163 The commenter said such 

information was necessary because 

issues on exports in demurrage and 

detention invoices are caused by last 

minute schedule changes over which 

the shipper has no control. 

FMC response: The Commission 

declines at this time to mandate that 

billing parties include all previous 

revisions. We do not believe that 

enough evidence has been presented to 

the Commission at this time to justify 

the increased burden of such a 

requirement. However, we will continue 

to monitor the issue of demurrage and 

detention invoices and may consider 

this or other additional changes in the 

future if circumstances warrant. 

3. § 541.6(c), Rate Information 

The Commission did not receive 

comments regarding proposed 

§ 541.6(c). It is adopting the proposed 

language from the NPRM in this final 

rule with minor, non-substantive, 

clarifying amendments. In paragraph (c), 

‘‘The invoice’’ has been changed to ‘‘A 

demurrage or detention invoice’’ to 

reflect the language of § 541.3. 

Paragraph (c) has also been amended to 

clarify that these are minimum 

requirements. Paragraph (c)(2) has been 

amended by adding terminal schedule 

to the listed examples of documents, 

and ‘‘i.e.,’’ has been changed to ‘‘e.g.,’’ 

to reflect that this is not an exhaustive 

list of all possible documents. 

4. § 541.6(d), Dispute Information 

(a) § 541.6(d)(1) 

One commenter suggested eliminating 

paragraphs (d)(2) and (3) and merging 

the necessary information into a single 

paragraph § 541.6(d) to read as follows: 

‘‘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 including the name, 

email, telephone number and mailing 

address of the responsible person to 

whom invoice questions or notifications 

of a billing dispute must be 

submitted.’’ 164 According to the 

commenter, the proposed revision 

‘‘prevent[s] the imposition of potentially 

unreasonable or obstructive processes 

by the billing party’’ and instead allows 

disputes to be handled following the 

standard business practice for similar 

events. 

FMC response: The Commission 

declines to make the suggested changes. 

Subsection (d)(1) already accomplishes 

what the proposed changes seek. In 

addition, this rule makes dispute 

resolution simpler, more consistent, and 

transparent. These are the same goals 

that the Commission espoused in the 

Interpretive Rule, which the commenter 

acknowledges in their submission. In 

addition, the ‘‘conventional manner’’ in 

which these disputes have been handled 

‘‘in the normal course of business’’ for 

which the commenter advocates have 

until now not always been successful 

and resulted in practices that resulted in 

OSRA 2022 and this rulemaking. 

Maintaining the existing model would 

fail to address the reasons behind the 

statute and this rulemaking. 

(b) § 541.6(d)(2), Information on How To 

Request Fee Mitigation, Refund, or 

Waiver 

Issue: The Commission received a 

number of comments regarding the 

proposed requirement in § 541.6(d)(2) 

that the URL address of a publicly 

accessible part of the billing party’s 

website provide a detailed description 

of what the billed party must provide to 

request fee mitigation, refund or waver. 

Two commenters said that the proposed 

URL requirement would be too 

burdensome. One of these commenters 

urged the Commission to instead adopt 

a requirement that allows for any 

method of delivery of such information 

to the shipper so long as it includes a 

transparent description of the required 

information.165 The other commenter 

said that the proposal could lead to 

burdensome procedures that are 

inconsistent with the shifting of the 

burden of proof regarding 

reasonableness of the charges from 

shippers to carriers that OSRA 2022 

espouses.166 Six commenters were in 

support of the URL requirement.167 The 

International Dairy Foods Association 

stated that this requirement ‘‘will help 

cargo owners easily find and understand 

what information they need to include 

in such requests. This will improve the 

efficiency of the dispute process and 

make it less likely that requests are 

denied on procedural grounds.’’ 168

Three additional commenters all said 

the rule would benefit from expanding 

the acceptable digital platforms beyond 

URLs to include QR codes or digital 

watermarks, for example, so that 

information regarding the dispute 

process can be retrieved to keep pace 

with evolving innovations and 

technologies.169 The Meat Import 

Council of America, Inc. and the North 

American Meat Institute proposed 

replacing ‘‘URL address’’ with either 

‘‘[a] digital trigger (URL address, QR 

code, digital watermark or other similar 

digital triggers) to the 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’’ or ‘‘[a] 

digital trigger to the 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.’’ 170

FMC response: The Commission 

disagrees with the two commenters’ 

assertion that the proposed requirement 

is too burdensome. While there may be 

some initial time/infrastructure 

requirements in order for some billing 

parties to comply, those will be 

minimal, and the benefits of 

transparency to billed parties greatly 

outweigh these minimal burdens. In 

response to commenters, the 

Commission has added language to 

§ 541.6(d)(2) to expand this category 

from URLs to digital means more 

generally, including URLs, QR codes 

and other digital means that would 

allow this requirement to keep pace 

with technology. 


khammond on DSKJM1Z7X2PROD with RULES3
14346 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

171FMC–2022–0066–0096. 

172FMC–2022–0066–0269. 

173 Id. 

174A Customs Brokerage, Inc. (FMC–2022–0066– 

0200). 

175The National Association of Waterfront 

Employers (FMC–2022–0066–0276); Husky 

Terminal and Stevedoring, LLC (FMC–2022–0066– 

0248); and Ports America/SSA Marine (FMC–2022– 

0066–0249). 

176Maher Terminals LLC (FMC–2022–0066– 

0269). 

177The U.S Dairy Export Council/National Milk 

Producers Federation (FMC–2022–0066–0235). 

178 International Dairy Foods Association (FMC– 

2022–0066–0244). 

179 Id. 

180FMC–2022–0066–0090. 

181FMC–2022–0066–0210. 

182FMC–2022–0066–0184. 

(c) § 541.6(d)(3), Disclosure of 

Timeframe for Requesting a Fee 

Mitigation, Refund, or Waiver 

The Commission did not receive 

comments regarding proposed 

§ 541.6(d)(3) and is adopting the 

proposed language from the NPRM in 

this final rule. 

5. § 541.6(e), Certifications 

(a) § 541.6(e)(1), Certification of 

Compliance With FMC Demurrage and 

Detention Rules 

Issue: The International Tank 

Container Organisation 171 and Maher 

Terminals LLC172 argued that the 

certification of compliance is not 

necessary given that it is legally 

required for regulated parties to comply 

with Commission regulations. Maher 

Terminals also expressed concern that 

such a certification would require 

billing parties ‘‘to state as a fact a matter 

that which is really a conclusion of 

law.’’ 173

FMC response: Certification that the 

billing party’s charges are consistent 

with FMC detention and demurrage 

rules is required by 46 U.S.C. 

41104(d)(2)(L). Accordingly, the 

Commission will include it in the rule. 

(b) § 541.6(e)(2), Certification That 

Billing Party’s Performance Did Not 

Cause or Contribute to the Underlying 

Invoiced Charges 

Issue: One commenter said that the 

certification statement should reflect an 

NVOCC’s more limited liability in 

instances where it is simply passing 

through the charges from a VOCC and, 

as with the other required elements on 

the invoice, is just a vehicle and not the 

responsible party.174 They provided the 

following sample certification statement 

for the Commission’s consideration: ‘‘To 

the best of our knowledge the charges 

on this invoice are a direct pass through 

and compliant with the requirements of 

the Shipping [Act] of 1984 as amended 

by [OSRA 2022] and that our NVOCC 

did not cause, contribute, or mark up 

these underlying charges.’’ 

FMC response: The Commission 

declines to change the proposed 

language and finalizes it in this rule. A 

billing party has a legal obligation to 

include accurate information on each of 

the invoice elements found in § 541.6. 

In accordance with 46 U.S.C. 41104, the 

Commission will make a determination 

if a particular self-certification is 

inaccurate or false only after an 

investigation following filing of a charge 

complaint. 

(c) MTOs 

Issue: Four commenters argued that 

MTOs do not have the information 

necessary to make these certifications 

and certifications should not be 

required of MTOs because of the burden 

it would impose on them to collect the 

necessary information, and further, such 

certification would not address the 

Commission’s primary concern, which 

is having transparent and clear invoices 

for billed parties to clearly understand 

billed charges.175 A fifth commenter 

asserted that imposing these 

certifications on MTOs is beyond OSRA 

2022.176

FMC response: In instances where an 

MTO invoices a shipper, the 

Commission has determined that the 

MTO should be subject to the same 

regulations that apply to VOCCs and 

NVOCCs, including certification 

requirements. As discussed earlier in 

this preamble, the Commission has 

statutory authority to apply this rule to 

MTOs. Paragraph (c) of section 41102, 

title 46, United States Code, prohibits 

MTOs from failing to establish, observe, 

and enforce reasonable practices 

connected to the receiving, handling, 

storing, or delivering of property. This 

section provides clear and direct 

authority for the Commission to regulate 

MTO practices connected to the 

receiving, handling, storing, or delivery 

of cargo, including mandating 

certification requirements. In addition, 

OSRA 2022 explicitly instructed the 

Commission to issue a rule defining 

prohibited practices by common 

carriers, marine terminal operators, 

shippers, and ocean transportation 

intermediaries under 46 U.S.C. 41102(c) 

regarding the assessment of demurrage 

and detention charges. MTOs are not 

required to include the data elements 

listed in § 541.6 when they are issuing 

invoices to VOCCs. 

(d) Additional Certification/Disclaimer 

Issue: One comment said that the rule 

should include a requirement on the 

invoice or the accompanying website a 

note that reminds the billed party that 

if the information is incorrect or details 

are missing, then the shipper is not 

obligated to pay the invoice.177

FMC response: At this time, the 

Commission will not impose additional 

mandatory certifications/disclaimers on 

top of those found in OSRA 2022, as 

codified at 46 U.S.C. 41104(d)(2)(L) and 

(M). Nonetheless, the agency recognizes 

the potential benefits of such a 

statement and does not object to the 

voluntary adoption of this practice. 

(e) Independent Assessment 

Issue: One commenter posited that in 

addition to the self-certification 

requirements of OSRA 2022, the 

Commission should also consider 

requiring billing parties to utilize an 

independent third-party certification 

body, from an official roster of such 

bodies that is recognized by the 

Commission, to conduct an annual audit 

of billing party’s detention and 

demurrage practices and provide an 

annual report to the FMC with its 

findings.178 According to the 

commenter, the self-certification 

requirements of OSRA 2022 provide no 

benefit to billed parties as they do not 

prevent ‘‘over-invoicing by carriers.’’ 

According to the commenter, since the 

self-certification requirements took 

effect with the passage of OSRA 2022, 

their members ‘‘have received detention 

and demurrage invoices that included 

such a statement, that were later 

refunded or waived by the carrier when 

disputed because the carrier issued the 

invoice after having rolled shippers’ 

bookings for weeks on end.’’ 179

FMC response: The Commission 

declines to adopt this change at this 

time. The Commission will continue to 

monitor the situation following 

implementation of this final rule and 

may take additional action(s) in the 

future if circumstances warrant. 

6. Contents of Invoice, Generally 

(a) Machine-Readable Invoice Data 

Issue: A few commenters indicated 

their support for the Commission to 

explore mandating that invoice data be 

provided in electronic, computerreadable format, such as spreadsheets. 

American Chemistry Council 180 and 

Consumer Brands Association,181 for 

example, highlighted that providing 

computer-readable data invoices would 

allow for faster and more accurate 

analysis of demurrage charges and 

associated data. American Chemistry 

Council 182 and Agriculture 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14347 

183FMC–2022–0066–0275. 

184 Greg Knowler, Key supply chain stakeholders 

commit to electronic bills of lading, Journal of 

Commerce, Sept. 5, 2023 (https://www.joc.com/ 

article/key-supply-chain-stakeholders-commitelectronic-bills-lading_20230904.html). 

185Ports America/SSA Marine (FMC–2022–0066– 

0249). 

186FMC–2022–0066–0274. 187National Fisheries Institute (FMC–2022–0066– 

0256). 188FMC–2022–0066–0157. 189FMC–2022–0066–0227. 

190FMC–2022–0066–0242. 

191FMC–2022–0066–0255. 

192FMC–2022–0066–0268. 

193FMC–2022–0066–0257. 

194FMC–2022–0066–0240. 

195FMC–2022–0066–0230. 

Transportation Coalition 183 both noted 

in their comment that U.S. Surface 

Transportation Board (STB) regulations 

require Class I railroads to provide 

machine-readable access to demurrage 

billing information. 

FMC response: Electronic invoices 

have a number of benefits for billing 

parties and billed parties, and the 

Commission highly encourages billing 

parties to adopt computer-readable 

invoice formats into their standard 

operating procedures. The Commission, 

however, has chosen not to mandate 

usage at this time due to concerns about 

the current low rate of infiltration of 

electronic documentation processes 

within the industry. The Journal of 

Commerce, for example, recently 

reported that: ‘‘[o]nly 2.1% of bills of 

lading and waybills in the container 

trade were electronic last year.’’ 184 The 

Commission will continue to monitor 

the use of machine-readable invoices 

within the industry and may consider 

compulsory use in the future. 

(b) MTOs 

Issue: One comment asserted that if 

the Commission requires demurrage or 

detention invoices issued by MTOs to 

contain information in addition to those 

elements specifically enumerated in 

OSRA 2022, it should ‘‘recognize the 

nature of MTO pass through charges and 

either afford MTO invoices a 

conceptually similar safe harbor, or not 

compel MTOs to provide such 

information.’’ 185

FMC response: While the most 

common practice is for MTOs to invoice 

the VOCC and the VOCC to send a 

combined invoice to the shipper, in 

some cases MTOs bill shippers directly. 

The Commission’s primary concern 

with this rule is to ensure that billed 

parties understand the demurrage or 

detention invoices they receive. In 

instances where an MTO invoices a 

shipper, the MTO should be subject to 

the same regulations that apply to 

VOCCs and NVOCCS when they invoice 

shippers. 

G. § 541.7 Issuance of Demurrage or 

Detention Invoices 

1. § 541.7(a), Timeframe for Issuing an 

Invoice 

Issue: The Commission received 109 

comments on its proposal to require 

billing parties to issue detention and 

demurrage invoices within 30 days: one 

from another federal agency, 16 from 

BCOs, 66 from motor carriers, 10 from 

NVOCCs/OTIs/Customs Brokers/Thirdparty logistics (3PLs), 10 from 

individuals, and 6 from VOCCs/MTOs. 

The U.S. Department of Agriculture 

supported the 30-day time limit.186

Fifteen of the 16 BCOs supported the 

30-day requirement. One BCO thought 

that 30 days was too long and that the 

deadline should be 10 days.187 All of 

the motor carriers other than the 

Intermodal Association of North 

America (IANA), which administers the 

UIAA supported the 30-day time limit. 

The IANA advocated for the 

Commission to follow the UIAA 

standard of 60 days to issue demurrage 

and detention invoices (UIAA Section 

E.6).188 All of the NVOCC/OTI/Customs 

Brokers/3PLs supported the 30-day 

deadline. 

VOCCs/MTOs and their trade 

associations were mixed in their 

responses. Intransit Container fully 

supported a deadline of 30 days.189 The 

World Shipping Council (WSC) 190 and 

the American Association of Port 

Authorities 191 supported a deadline but 

said that the deadline should align with 

the UIAA standard of 60 days. Port 

Houston 192 and the Ocean Carrier 

Equipment Management Association, 

Inc. (OCEMA) 193 were adamant that the 

Commission should not impose a 

deadline at all. OCEMA said that if a 

deadline was imposed, it should be no 

later than the UIAA standard. OCEMA 

acknowledged that the Commission 

based their deadline of 30 days on an 

understanding that billing parties are 

capable of issuing demurrage or 

detention invoices, on average, within 

30 days. OCEMA, however, believes that 

justification was not adequately 

supported and potentially flawed. First, 

OCEMA said that the Commission did 

not explain how the average was 

derived, and it was therefore unclear 

how many of the transactions exceeded 

30 days. Second, OCEMA asserted that 

in making its determination, the 

Commission did not consider the 

potential sources of delay for those 

invoices that take more than 30 days to 

be issued, such as delays in 

transmission of essential data by third 

parties, IT system capabilities and 

differing levels of automation regionally 

in the invoicing process, personnel and 

labor shortages, force majeure events, or 

cyber-attacks or system outages. Related 

to this point, OCEMA also asserts that 

the Commission did not take into 

consideration that under a free-contract 

system, parties sometimes come to an 

agreement for longer deadlines in light 

of the circumstances applicable to a 

particular shipment for a given shipper 

or consignee’s product supply chain. 

The VOCCs and their trade 

associations also complained that the 

proposal is unfair. Hapag-Lloyd 

(America) LLC argued that the proposal 

provides no consequences for failure to 

timely submit a dispute to an invoice, 

so it is unclear what incentive billed 

parties have to respond quickly.194 WSC 

said that billed parties would face no 

consequences for failing to meet the 

deadline to dispute an invoice, while 

billing parties forfeit contractual rights 

by missing the deadline. WSC argued 

that fundamental fairness, equal 

protection, and due process dictate the 

Commission must add language to 

impose similar requirements on billed 

parties, namely that they forfeit the right 

to request fee mitigation, refund, or 

waiver by failing to submit that request 

within 30-days from receiving the 

invoice. OCEMA focused on the fact 

that the rule includes no flexibility for 

delays outside the billing parties’ 

control, for instance caused by third 

parties, that prevent compliance with 

the 30-day deadline to issue invoices. 

Finally, OCEMA argued that the 30-day 

deadline could turn out to create a 

disincentive principle since shippers or 

truckers in possession of equipment will 

no longer feel compelled to return it 

quickly as the unavailability of data or 

other tools to delay billing will prevent 

billing parties from meeting the 30-day 

deadline. 

BassTech International LLC stated 

that the proposed rule’s invoicing 

requirements do not address the need 

for invoicing ‘‘on demand’’ in instances 

where payment is a prerequisite for 

cargo release, such as is customary for 

import demurrage charges.195 As such, 

they suggested revising § 541.7(a) to 

read as follows: ‘‘A billing party must 

issue a demurrage or detention invoice 

within thirty (30) days from the date on 

which the charge was last incurred or, 

when payment of charges is a 

precondition for delivery of cargo or 

containers, on demand. If the billing 

party does not issue demurrage or 

detention invoices within the required 


khammond on DSKJM1Z7X2PROD with RULES3
14348 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

196 87 FR 62341, 62354. 197FMC–2022–0066–0242; FMC–2022–0066– 

0257. 198See Testimony of Chairman Maffei before 

Congress: ‘‘Review of Fiscal Year 2024 Budget 

Request for the Federal Maritime Transportation 

Programs, and Implementation of the Ocean 

Shipping Reform Act of 2022,’’ March 23, 2023, 

available at https://www.fmc.gov/testimony-ofchairman-maffei-before-congress-review-of-fy2024- 

budget/; Statement by President Joe Biden on 

Congressional Passage of Ocean Shipping Reform 

Act, June 13, 2022, available at https://

www.whitehouse.gov/briefing-room/statementsreleases/2022/06/13/statement-by-president-joebiden-on-congressional-passage-of-ocean-shippingreform-act/#:∼:text=Statement%20by

%20President%20Joe%20Biden

%20on%20Congressional%20Passage

%20of%20Ocean%20Shipping%20

Reform%20Act,-Home&text=

Lowering%20prices%20for%20Americans

%20is,American%20retailers%2C

%20farmers%20and%20consumers. 

199FMC–2022–0066–0274. 

200FMC–2022–0066–0240. 

201FMC–2022–0066–0242. 

202BassTech International LLC (FMC–2022– 

0066–0230). 

timeframe, then the billed party is not 

required to pay the charge.’’ 

FMC response: The Commission will 

maintain the 30 days proposed in the 

NPRM. The Commission explained in 

the NPRM why a deadline of 30 days for 

issuing demurrage or detention invoices 

is reasonable.196 WSC and OCEMA 

suggest the Commission should prove 

why other deadlines are unreasonable 

before proposing a deadline, but the 

Commission declines this invitation to 

try to prove a negative. WSC and 

OCEMA did not offer concrete examples 

of why billing parties could not comply 

with a 30-day deadline, and instead 

made reference to delays caused by 

third parties without offering specifics 

of the types of delays they routinely face 

or how long they take to resolve.197 The 

Commission does not agree with the 

argument that the deadline in the rule 

is insufficiently supported. 

Neither is the Commission persuaded 

by commenters stating that it should 

follow widely accepted and 

longstanding practices. The text of 

OSRA 2022 indicates it was written to 

help remedy dysfunctional, predatory, 

and unfair invoicing permitted by these 

accepted and longstanding practices.198

The complaint that this proposal is 

unfair and inequitable to carriers 

misunderstands the regulation’s 

approach to implementing OSRA. The 

rule provides a minimum time for the 

dispute of detention and demurrage 

invoices, after which billing parties are 

free to reject any further attempts at 

dispute as untimely. The rule does not 

lay out penalties for failure by a billed 

party to timely dispute an invoice, 

because it is up to the billing party to 

choose how to remedy that failure. 

2. § 541.7(b), Invoices Sent to an 

Incorrect Party 

Issue: The U.S. Department of 

Agriculture expressed concern about 

billed parties incurring additional costs 

of unexpected and harder-to-verify 

charges in situations where the invoice 

was originally sent to the wrong 

person.199 USDA urged that the 

Commission remove from the rule the 

proposed grant of additional time to the 

billing party to issue an invoice to a 

billed party when the invoice was 

originally issued to an incorrect person 

(and that original recipient disputed the 

charges). USDA asserted that the carrier 

should, in all circumstances, have 30 

days from the date charges stop accruing 

to bill the correct party. 

Hapag-Lloyd (America) LLC noted 

that the rule provides no consequences 

for failing to timely dispute an 

invoice.200 They asserted that, given the 

requirement that billing parties must 

issue corrected invoices within 60 days, 

the rule actively dissuades billed parties 

from timely settling disputes. The 

World Shipping Council pointed out 

that 46 CFR 541.7(b) sets a hard 

deadline of 60 days after the charges 

were last incurred by which the correct 

party must be invoiced but if a billing 

party uses 30 days to issue the invoice 

and the billed party takes 30 days to 

dispute the invoice, there is no time left 

to bill another party before the 60-day 

invoicing deadline.201 WSC said that 

this would result in the correct party not 

having to pay the invoice and billed 

parties being incentivized to delay 

disputing invoices. 

Another commenter requested that 

paragraph (b) be deleted from § 541.7 

‘‘and to leave this exceptional 

circumstance to be handled through 

reasonable and conventional business 

practice . . . .’’ 202

FMC response: The final rule removes 

the link between a billing party’s ability 

to reissue an invoice with an incorrectly 

billed party’s disputing of that invoice. 

With this reworded language, the billing 

party must reissue the invoice to the 

correct party within 30 calendar days of 

when the charges were last incurred. 

Otherwise, the billed party is not 

required to pay the charges. This 

penalty is consistent with the language 

and purposes of OSRA 2022. It also 

reflects the Commission’s position that 

the billing party should only be issuing 

a demurrage and detention invoice to a 

billed party based on their contractual 

privity with that billed party, and that 

this invoice should be sent to the correct 

party in the first instance. Tying the 

issuance of the corrected invoice to 

when the demurrage and detention 

charges stop accruing is consistent with 

the incentive present in the rest of the 

rule. The burden of issuing a correct 

invoice should not rely on an 

incorrectly billed party to dispute the 

incorrect invoice. The change is also 

consistent with the comments received 

on the NPRM. 

3. Timeframes for NVOCCs 

Issue: The Commission solicited 

comments in the NPRM on whether 

different timeframes should apply to 

NVOCCs. Most commenters supported 

applying the same timelines to NVOCCs 

and VOCCs. However, when NVOCCs 

pass through demurrage or detention 

invoices assessed against their 

customers, it may be difficult for them 

to issue demurrage and detention 

invoices within the required timeframe 

if the NVOCC does not receive the 

initial invoice in a timely manner. 

Therefore, the Commission requested 

comments on how it could best reflect 

the application of the deadline to 

NVOCCs that pass through demurrage or 

detention charges. A number of 

NVOCCs commented that § 541.7’s 

thirty (30) calendar-day timeframe for a 

billing party to issue an invoice did not 

allow time for an NVOCC to issue an 

invoice when it passes through the 

charges. Many of these comments 

supported adding additional time to 

§ 541.7 for NVOCCs to issue an invoice. 

Some of the comments suggested 

specific extra time that ranged from 21 

days to 60 days. Many suggested an 

extra 30 days because the initial billing 

party had 30 days to issue an invoice, 

and NVOCCs should be given the same 

amount of time. CMA CGM argued that 

it is vital that the deadline for resolution 

not be triggered until all the information 

required to support the dispute is 

submitted to the carrier and that the rule 

should emphasize, not undermine, the 

carriers’ publicly available dispute 

resolution process. 

FMC response: In response to these 

comments, the Commission has 

amended § 541.7 to state that NVOCCs 

have an additional thirty (30) calendar 

days in which to issue an invoice. This 

30-day period runs from the date on 

which the invoice the NVOCC received 

was issued. In addition, the Commission 

recognizes the fact that an NVOCC can 

be both a billed party and a billing party 

with respect to the same transaction, 

and that in such a situation, the NVOCC 

may not be in a position to dispute an 

invoice with a VOCC until the NVOCC’s 

customer has disputed the invoice with 

the NVOCC. As such, the Commission 

has added § 541.7(c) to require that 

when an NVOCC informs a VOCC that 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14349 

203FMC–2022–0066–0165. 

204FMC–2022–0066–0217. 

205FMC–2022–0066–0247. 

206FMC–2022–0066–0267. 

207FMC–2022–0066–0235. 

208FMC–2022–0066–0236. 209FMC–2022–0066–0165. 

210American Association of Exporters and 

Importers (FMC–2022–0066–0168). 

211 International Tank Container Organisation 

(FMC–2022–0066–0096); Excargo Services Inc. 

(FMC–2022–0066–0151); Seafrigo USA Inc. (FMC– 

2022–0066–0223); APL Logistics Americas, Ltd 

(FMC–2022–0066–0271); New York New Jersey 

Foreign Freight Forwarders and Brokers 

Association, Inc. (FMC–2022–0066–0247). 

212Northwest Horticultural Council (FMC–2022– 

0066–0178); American Chemistry Council (FMC– 

2022–0066–0184); International Housewares 

Association (FMC–2022–0066–0187); MICA/NAMI 

(FMC–2022–0066–0188); Tyson Foods, Inc. (FMC– 

2022–0066–0225); National Association of Beverage 

Importers, Inc. FMC–2022–0066–0238); 

International Dairy Foods Association (FMC–2022– 

0066–0244); Agriculture Transportation Coalition 

(FMC–2022–0066–0275). 

213BW Mitchum Trucking Co. (FMC–2022–0066– 

0110); GBA Transport (FMC–2022–0066–0152); 

Triple G Express (FMC–2022–0066–0154); 

MacMillan-Piper, Inc. (FMC–2022–0066–0159); 

Bridgeside Inc. (FMC–2022–0066–0179); Intermodal 

Motor Carriers Conference (FMC–2022–0066–0189); 

Eagle Systems, Inc. (FMC–2022–0066–0203); BiState Motor Carriers (FMC–2022–0066–0212); 

California Trucking Association (FMC–2022–0066– 

0220); Maryland Motor Truck Association, Inc. 

(FMC–2022–0066–0241); Virginia Trucking 

Association (FMC–2022–0066–0260); Harbor 

Trucking Association (FMC–2022–0066–0261); 

California Trucking Association (FMC–2022–0066– 

0270). 

214U.S. Department of Agriculture (FMC–2022– 

0066–0274). 

its customer has disputed its invoice, 

the VOCC must then allow the NVOCC 

additional time to dispute the invoice it 

received from the VOCC. 

4. Ability To Cure an Invoice Not in 

Compliance With § 541.6 

Issue: A number of commenters 

requested the ability to correct an 

invoice that lacked certain information 

or contained incorrect data. FedEx 

Trade Networks, for example, stated that 

the ability to cure an invoice error is 

reasonable, especially given that a billed 

party is not required to pay the invoice 

in the face of any error.203 Commenters 

also sought clarification on the timing of 

amendments, if amendments are 

allowable. FedEx Trade Networks stated 

that each billing party should have the 

same amount of time to correct the 

invoice, as an error that originates with 

the VOCC may need to be remedied by 

the ocean carrier and each subsequent 

billing party. CV International suggested 

that the billing party have two working 

days from the time the billed party 

communicates the error to make the 

corrections, during which time no 

additional demurrage and detention 

charges should accrue.204 The New York 

New Jersey Foreign Freight Forwarders 

and Brokers Association, Inc. echoed 

these sentiments and also suggested that 

billed parties should be required to 

notify the billing party of any errors 

within a specific time frame, such as 

seven days.205 John S. O’Connor 

Logistics made similar suggestions as 

well.206 U.S. Dairy Export Council/ 

National Milk Producers Federation 

requested clarification regarding a 

carrier’s submission of a corrected 

invoice, and whether that must that be 

completed within the 30-day timeframe, 

or whether it restarts the clock.207

Connection Chemical requested similar 

clarification.208

FMC response: The Commission 

declines to add time for a billing party 

to correct its invoice. While billing 

parties have an obligation under 46 

U.S.C. 41104(d)(2) to issue accurate 

invoices, issuing an invoice that does 

not comply with OSRA 2022’s 

requirements does not permanently 

eliminate the billed party’s obligation to 

pay those charges. In particular, 46 

U.S.C. 41104(f) cancels the obligation to 

pay an invoice that does not conform to 

OSRA but does not prevent the carrier 

from reissuing the charges on an 

invoice/bill that does meet the statutory 

requirements. The correctly billed party 

has an obligation to pay charges billed 

via a compliant invoice. In addition, 

given the statutory obligation in 46 

U.S.C. 41104(d)(2), the Commission also 

declines to add a requirement that billed 

parties inform billing parties of any 

inaccuracies. 

5. § 541.7, General Comments 

FedEx Trade Networks stated that the 

Commission should make clear that 

when a demurrage or detention charge 

is in dispute, the billing party should be 

prohibited from issuing further overdue 

statements.209 In addition, FedEx Trade 

Networks recommended that the 

Commission explicitly state conditions 

under which the billing party may not 

charge demurrage and detention, such 

as when: the container has not arrived 

at the port; the container is not available 

within the terminal; the container 

cannot be released due to a hold by any 

government action; the container is in 

the terminal, but the ocean carrier fails 

to load it on the ocean vessel; the 

container is in a closed, blocked or 

inaccessible area; no appointments to 

pick-up freight are available; there is a 

‘‘dual transaction,’’ in which a container 

cannot be picked up unless another 

piece of equipment is returned is 

required; and the equipment must be 

returned to a different location to be 

accepted. 

FedEx Trade Networks also 

recommended that when demurrage and 

detention fees do have to be paid, the 

Commission should implement certain 

requirements to create greater 

efficiencies and serve the objective of 

demurrage and detention: demurrage 

bills should be separated from freight 

pick-up for credit-worthy customers; 

demurrage should be a standard amount 

per port and per day, with no tiered 

fees; more payment options, such as 

electronic funds transfers, credit cards 

(without fees), should be available, and 

credit should be universally accepted; 

charges should be fair and reasonable, 

with the goal of moving freight from the 

terminal; the amortized value of the 

equipment should be considered when 

setting detention rates; and the bill 

should be readily available, especially 

online. 

FMC response: The Commission 

declines to make these changes to the 

final rule. The information required to 

be included in an invoice as per § 541.6 

should discourage billing parties from 

issuing demurrage and detention 

invoices when charges have not yet 

accrued, such as when a vessel has not 

yet arrived in port, because an 

improperly issued invoice means that 

the billed party will not have to pay it 

under the terms of § 541.5. In addition, 

the rule contains a dispute resolution 

process that is designed to motivate the 

parties to a find a resolution within a 

short timeframe. This process should 

allow cargo to be released sooner, as 

well as discourage parties from repeated 

behaviors such as continuously issuing 

overdue invoices. 

Furthermore, this rule provides the 

requirements for detention and 

demurrage invoices and is already 

designed to make the process more 

efficient. FedEx Trade Networks’ 

suggestions are outside the process for 

demurrage and detention billing 

requirements. As such, they are outside 

the scope of this rulemaking. 

H. § 541.8 Requests for Fee Mitigation, 

Refund, or Waiver 

1. § 541.8(a), Request for Mitigation, 

Refund, or Waiver of Fees From the 

Billing Party 

Issue: The Commission proposed 

giving billed parties 30 days to dispute 

demurrage and detention charges. Fortyfive comments were submitted on this 

issue. Twenty-eight comments 

supported or supported with 

qualification the proposal (1 VOCC,210 5 

NVOCCs/OTIs/3PLs,211 8 BCOs,212 13 

Motor Carriers,213 and 1 Federal 

agency 214). One commenter that 


khammond on DSKJM1Z7X2PROD with RULES3
14350 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

215Harbor Trucking Association (FMC–2022– 

0066–0261). 216Shippers Coalition (FMC–2022–0066–0160); 

National Association of Chemical Distributors 

(FMC–2022–0066–0208); Consumer Brands 

Association (FMC–2022–0066–0210); Consumer 

Technology Association (FMC–2022–0066–0228); 

BassTech International LLC (FMC–2022–0066– 

0230); National Retail Federation (FMC–2022– 

0066–0231); National Milk Producers Federation/ 

U.S. Diary Export Council (FMC–2022–0066–0235); 

Connection Chemical (FMC–2022–0066–0236); 

Retail Industry Leaders Association (FMC–2022– 

0066–0259); National Association of Manufacturers 

(FMC–2022–0066–0264); National Industrial 

Transportation League (FMC–2022–0066–0277). 

217 DHL Global Forwarding (FMC–2022–0066– 

0219); CVI International (FMC–2022–0066–0217); 

International Association of Movers (FMC–2022– 

0066–0222). 218Hapag-Lloyd (America) LLC (FMC–2022– 

0066–0240); World Shipping Council (FMC–2022– 

0066–0242); Maher Terminals LLC (FMC–2022– 

0066–0269). 219FMC–2022–0066–0275. 220FMC–2022–0066–0184. 221 Id. 222FMC–2022–0066–0238. 

223FMC–2022–0066–0247. 

224E.g., Connection Chemical (FMC–2022–0066– 

0236); National Association of Chemical 

Distributors (FMC–2022–0066–0208). 

225National Association of Chemical Distributors 

(FMC–2022–0066–0208). 

226E.g., Consumer Technology Association 

(FMC–2022–0066–0228); Retail Industry Leaders 

Association (FMC–2022–0066–0259). 

227E.g., National Retail Federation (FMC–2022– 

0066–0231). 

228National Association of Chemical Distributors 

(FMC–2022–0066–0208). 

229 Id. 

230Shippers Coalition (FMC–2022–0066–0160); 

Consumer Brands Association (FMC–2022–0066– 

0210); International Association of Movers (FMC– 

2022–0066–0222); National Milk Producers 

Federation/U.S. Dairy Export Council (FMC–2022– 

0066–0235); Retail Industry Leaders Association 

(FMC–2022–0066–0259). 

231E.g., Connection Chemical (FMC–2022–0066– 

0236); National Retail Federation (FMC–2022– 

0066–0231). 

232National Association of Chemical Distributors 

(FMC–2022–0066–0208); BassTech International 

LLC (FMC–2022–0066–0230); National Industrial 

Transportation League (FMC–2022–0066–0277). 

233FMC–2022–0066–0240. 

234FMC–2022–0066–0242. 

235FMC–2022–0066–0257. 

supported the proposal said that the 30- 

day time limit ‘‘will incentivize billing 

parties to ensure the accuracy of their 

invoices from the start.’’ 215 Fourteen 

comments were in clear opposition (11 

BCOs 216 and 3 NVOCCs/3PLs 217). 

Three additional commenters submitted 

comments on the matter that did not fall 

neatly into either support or 

opposition.218

As noted above, some of the 

commenters that supported the 

proposal, did so with qualification. The 

Agriculture Transportation Coalition 

said that 30 days is sufficient time for 

shippers to review invoices and submit 

requests for fee mitigation, refund, or 

waiver but that the clock should start 

once the shipper receives the invoice or 

after the invoice has been posted on-line 

in a location accessible to the 

shipper.219 American Chemistry 

Council had similar views to 

Agriculture Transportation Coalition but 

said that the clock should not start until 

invoices are received by the billed 

party.220 American Chemistry Council 

explained: ‘‘Carriers are increasingly 

moving to online systems where the 

billed party must search for new 

invoices. Because of resource 

constraints, small companies may track 

new invoices on a weekly basis, rather 

than daily.’’ 221 To address this concern, 

American Chemistry Council proposed 

amending § 541.8 by adding at the end 

‘‘. . . or within thirty-seven (37) days of 

the billing party making the invoice 

available online’’ to ensure that these 

companies have the full 30-day window 

to review invoices. The National 

Association of Beverage Importers, Inc. 

supported the 30-day timeframe but said 

that it should be subject to a one-time 

additional 30-day extension.222

Similarly, NYNJFF&BA supported a 30- 

day timeframe generally, but said the 

timeframe should be allowed to be 

extended if both parties agreed to the 

extension.223 (NYNJFF&BA did not put 

a time limit on how far the deadline 

could be extended so long as both 

parties were in agreement.) NYNJFF&BA 

also said that the 30-day clock for a 

VOCC receipt of a dispute must be 

extended to accommodate the request if 

the dispute was raised within the proper 

timelines from the final party billed. 

Billed parties, such as shippers and 

their trade associations, generally 

argued that 30 days is insufficient. They 

argued that they need more time 

because shippers do not have the 

administrative bandwidth to examine 

each invoice carefully within 30 days 

and to determine if a dispute should be 

filed, particularly considering that some 

charges have unique and complex 

scenarios that need to be investigated 

before they are disputed.224

Commenters noted that low 

administrative bandwidth could be 

caused by a variety of factors, including: 

the billed party being a small 

business,225 because of high 

transactional volume,226 or because of 

the use of third-party auditors.227 Some 

commenters pointed out that a billed 

party’s primary business is not 

transportation, as opposed to billing 

parties, so shippers are at a 

disadvantage relative to carriers in 

validating and disputing invoices. Some 

expressed concern that a 30-day period 

for submitting invoice disputes could be 

construed as a legal ‘‘condition 

precedent’’ to filing a claim and 

essentially function to shorten the 

statute of limitations for claims brought 

before the Commission.228 The National 

Retail Federation pointed out that while 

the Commission said in the NPRM that 

it was basing the 30-day deadline on the 

UIAA, that shippers have never been a 

party to the UIAA.229 As an alternative, 

several of these commenters argued that 

a 60-day time period is more 

appropriate.230 Other billed parties, 

however, argued that 30 days is 

insufficient without proposing an 

alternative timeframe,231 or proposed 

eliminating the timeframe requirement 

entirely.232

VOCCs and their trade associations 

asserted the proposal is unfair. HapagLloyd (America) LLC argued that the 

proposal provides no consequences for 

failure to timely submit a dispute to an 

invoice, so it is unclear what incentive 

billed parties have to respond 

quickly.233 The World Shipping Council 

said that billed parties face no 

consequences for failing to meet the 

deadline to dispute an invoice, while 

billing parties forfeit contractual rights 

by missing the deadline.234 WSC argued 

that fundamental fairness, equal 

protection, and due process dictate the 

Commission must add language to 

impose similar requirements on billed 

parties, namely that they forfeit the right 

to request fee mitigation, refund, or 

waiver by failing to submit that request 

within 30-days from receiving the 

invoice. The Ocean Carrier Equipment 

Management Association, Inc. focused 

on the fact that the rule includes no 

flexibility for delays outside the billing 

parties’ control, for instance caused by 

third parties, that prevent compliance 

with the 30-day deadline to issue 

invoices.235 Finally, OCEMA argued 

that the 30-day deadline could turn out 

to create a disincentive principle since 

shippers or truckers in possession of 

equipment will no longer feel 

compelled to return it quickly as the 

unavailability of data or other tools to 

delay billing will prevent billing parties 

from meeting the 30-day deadline. 

Commenters also expressed concern 

about the Commission setting strict 

deadlines for billing parties that could 

result in forfeiting contractual rights, 

with billed parties potentially facing no 

consequences for failing to meet the 

rule’s deadlines. For instance, WSC, 

OCEMA, and Hapag-Lloyd all argued 

that it is unfair that billed parties face 

no consequences for failing to timely 

submit a dispute to an invoice. The 

Pacific Merchant Shipping Association 

(PMSA) agreed with WSC that the lack 

of consequences for billed parties is 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14351 

236FMC–2022–0066–0233. 

237 Id. 

238Northwest Horticultural Council (FMC–2022– 

0066–0178); American Chemistry Council (FMC– 

2022–0066–0184); International Housewares 

Association (FMC–2022–0066–0187); MICA/NAMI 

(FMC–2022–0066–0188); Tyson Foods, Inc. (FMC– 

2022–0066–0225); National Association of Beverage 

Importers, Inc. (FMC–2022–0066–0238); 

International Dairy Foods Association (FMC–2022– 

0066–0244); Agriculture Transportation Coalition 

(FMC–2022–0066–0275). 

239 International Tank Container Organisation 

(FMC–2022–0066–0096); Excargo Services Inc. 

(FMC–2022–0066–0151); Seafrigo USA Inc. (FMC– 

2022–0066–0223); New York New Jersey Foreign 

Freight Forwarders and Brokers Association, Inc. 

(FMC–2022–0066–0247); APL Logistics, Ltd (FMC– 

2022–0066–0271). 

240BW Mitchum Trucking Co. (FMC–2022–0066– 

0110); GBA Transport (FMC–2022–0066–0152); 

Triple G Express (FMC–2022–0066–0154); 

MacMillan-Piper, Inc. (FMC–2022–0066–0159); 

Bridgeside Inc.(FMC–2022–0066–0179); Intermodal 

Motor Carriers Conference (FMC–2022–0066–0189); 

Eagle Systems, Inc. (FMC–2022–0066–0203); BiState Motor Carriers (FMC–2022–0066–0212); 

California Trucking Association (FMC–2022–0066– 

0220); Maryland Motor Truck Association, Inc. 

(FMC–2022–0066–0241); Virginia Trucking 

Association (FMC–2022–0066–0260); Harbor 

Trucking Association (FMC–2022–0066–0261); 

California Trucking Association (FMC–2022–0066– 

0270). 

241American Association of Exporters and 

Importers (FMC–2022–0066–0168); World Shipping 

Council (FMC–2022–0066–0242); Maher Terminals 

LLC (FMC–2022–0066–0269). 

242U.S. Department of Agriculture (FMC–2022– 

0066–0274). 

243Consumer Technology Association (FMC– 

2022–0066–0228); National Retail Federation 

(FMC–2022–0066–0231); National Milk Producers 

Federation/U.S. Diary Export Council (FMC–2022– 

0066–0235); Retail Industry Leaders Association 

(FMC–2022–0066–0259); National Association of 

Manufacturers (FMC–2022–0066–0264); National 

Industrial Transportation League (FMC–2022– 

0066–0277). 

244CVI International (FMC–2022–0066–0217); 

DHL Global Forwarding (FMC–2022–0066–0219); 

International Association of Movers (FMC–2022– 

0066–0222). 

245Consumer Technology Association (FMC– 

2022–0066–0228). 

246E.g., National Retail Federation (FMC–2022– 

0066–0231); Retail Industry Leaders Association 

(FMC–2022–0066–0259). 

247FMC–2022–0066–0242. 

248FMC–2022–0066–0269. 

unfairly incongruous and 

inconsistent.236 PMSA argued that if the 

consequences of failing to meet the 

prescribed deadlines are not removed 

for billing parties, then the rule should 

require billed parties to pay the charge 

if they have not disputed it within the 

30-day deadline.237

FMC response: The Commission must 

balance the benefits to billed parties 

against the detriment to billing parties 

of an extended timeline to dispute 

invoices. The longer billed parties take 

to investigate charges, validate them, 

and marshal evidence, the longer billing 

parties remain in limbo about whether 

the billed party intends to pay. Billed 

parties advocated for an extended 

timeframe but did not provide 

compelling evidence of how long each 

part of the dispute process takes, for 

instance investigating invoices or 

validating charges. Nor did they explain 

how an extended timeframe for billed 

parties to evaluate invoices helps 

facilitate the movement of cargo. The 

rule’s new deadlines ensure billed 

parties are not scrambling to unearth 

ancient evidence to dispute stale 

invoices, and the Commission is not 

convinced by the evidence billed parties 

presented in support of extending the 

timeframe. 

Further, the regulatory timeframe for 

disputes serves only as a minimum 

timeframe billed parties must permit 

dispute. The timeframes are not 

designed or intended to control in every 

dispute scenario. They are intended to 

ensure billing parties provide some 

minimum time for a billed party to 

dispute an invoice. The billing and 

billed parties can agree to extend the 

timeframe, or the billed party can file a 

complaint with the Commission at any 

time. Nothing in the final rule prevents 

a billed party from filing a complaint 

during the 30-day dispute deadline or 

prevents a billed party from filing a 

complaint with the Commission even 

though they did not dispute the charge 

with the billing party during the 30-day 

timeframe. 

Based on this record, the Commission 

has removed the language from 

§ 541.8(b) stating that a billed party was 

not required to pay an invoice if a 

billing party takes longer than 30 days 

to resolve a dispute. The Commission 

also added language to § 541.8(b) to 

allow the parties to agree to longer 

timeframes for the dispute resolution 

process. These changes better allow for 

the balancing of benefits that this 

process requires. 

2. § 541.8(b), Resolution of Dispute 

(a) 30-Day Timeframe 

Issue: The Commission proposed 

giving parties 30 days to resolve a 

disputed demurrage or detention 

invoice charge. Thirty-nine comments 

were submitted on this issue. Thirty 

comments supported or supported with 

qualification the proposal (8 BCOs,238 5 

NVOCCs/OTIs/Customs Brokers/ 

3PLs,239 13 Motor Carriers,240 3 VOCCs/ 

MTOs,241 and 1 Federal agency 242). Six 

comments were opposed (all BCOs).243

The other three comments (all NVOCCs/ 

OTIs/Customs Brokers/3PL) that were 

submitted neither clearly supported nor 

opposed the proposal.244

Consumer Technology Association 

was concerned that the process would 

be subject to abuse and potentially 

undermine incentives of demurrage and 

detention charges.245 The commenter 

was particularly concerned with the 

possibility of parties overwhelming a 

carrier with requests for waivers/ 

refunds with the express intent of 

making it impossible for the carrier to 

act within 30 days. They said the 

Commission should make clear that: 

(1) carriers may adopt reasonable 

documentation requirements for claims for 

waivers/refunds, and that carriers do not 

waive their right to collect charges when they 

do not act on claims that fail to comply with 

reasonable documentation requirements; 

(2) claims that are not submitted to carriers 

via the informal dispute process are 

presumed reasonable and the burden of proof 

as to the unreasonableness of such charges 

shifts back to the entity challenging the 

charge; 

(3) Abuse of the informal dispute 

resolution process (e.g., by submitting 

excessive or frivolous claims) may constitute 

a violation of 46 U.S.C. 41102(a). 

(Alternatively, that abuse of the system 

creates a presumption that the charge was 

reasonable that must be overcome by the 

party challenging same); 

(4) At an absolute minimum, indicate that: 

billed parties have an obligation to act in 

good faith when disputing invoices, that 

submission of excessive and/or frivolous 

disputes does not constitute good faith, and 

that charges that are the subject of waiver/ 

refund requests not submitted in good faith 

are to be presumed reasonable. 

Other commenters who opposed the 

proposed regulation, generally said that 

they disagreed with it because it did not 

account for those instances when more 

than 30 days is required to investigate 

and reach a final resolution.246 Some 

commenters who generally supported 

the regulation agreed with these 

concerns. (The dividing line between 

support and opposition generally came 

down to those that supported some type 

of alternative timeframe to the strict 30 

days in the NPRM and those that would 

eliminate a specified timeframe 

entirely.) For example, the World 

Shipping Council generally supported 

the proposal but recommended that the 

30-day period be subject to a single 

extension request of a second 30-day 

period.247 Maher Terminals supported 

having a specific timeframe but said that 

instead of 30 days, the timeframe should 

be extended to 90–120 days.248

FMC response: The Commission has 

decided to maintain a 30-day dispute 

resolution timeframe, but in response to 

these comments has created an 

exception to allow for resolution beyond 

30 days when a later date has been 

agreed to by both parties. The 

Commission has also clarified in the 

text that the 30-day deadline is 30 


khammond on DSKJM1Z7X2PROD with RULES3
14352 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

249E.g., International Tank Container 

Organisation (FMC–2022–0066–0096); Dole Ocean 

Cargo Express, LLC (FMC–2022–0066–0201); 

Mediterranean Shipping Company (FMC–2022– 

0066–0142); World Shipping Council (FMC–2022– 

0066–0242); American Chemistry Council (FMC– 

2022–0066–0184); Shippers Coalition (FMC–2022– 

0066–0160); New York New Jersey Foreign Freight 

Forwarders and Brokers Association, Inc. (FMC– 

2022–0066–0247). 

250FMC–2022–0066–0142. 

251FMC–2022–0066–0242. 

252FMC–2022–0066–0184. 

253FMC–2022–0066–0160. 

254 Id. 

255 Industry Advisory—Interim Procedures for 

Submitting ‘‘Charge Complaints’’ Under 46 U.S.C. 

41310—Federal Maritime Commission—Federal 

Maritime Commission (fmc.gov) (posted July 14, 

2022) (https://www.fmc.gov/industry-advisoryinterim-procedures-for-submitting-chargecomplaints/). 

256FMC–2022–0066–0233. 

257FMC–2022–0066–0143. 

258FMC–2022–0066–0165. 

calendar days. The rule does not 

prescribe or prohibit the billing party 

from imposing reasonable consequences 

on the billed party for failing to dispute 

the charge during the 30-calendar-day 

period. 

(b) What does ‘‘resolve’’ mean? 

Issue: The Commission received 

several comments concerning what 

‘‘resolve’’ means in the proposed 

regulation.249 These commenters said it 

was unclear from the text of the 

proposed regulation whether a refund, if 

one were to be issued, or other final 

form of redress, needed to be completed 

within the 30-day deadline, or whether 

the parties merely needed to come to an 

agreement for resolution of the matter 

and final tender could be after the 30 

day deadline. Two commenters, 

Mediterranean Shipping Company 250

and the World Shipping Council,251

requested that the Commission formally 

define the term in the rule. American 

Chemistry Council had similar 

concerns, but instead of requesting that 

‘‘resolution’’ be defined, they requested 

that the Commission codify into the 

regulation that final redress be 

completed within the 30-day limit.252

Shippers Coalition expressed their 

concern that the proposed language 

would result in billing parties just 

saying ‘‘no’’ to a request for mitigation/ 

refund/waiver, in order meet the 30-day 

deadline.253 To address this concern, 

Shippers Coalition proposed amending 

§ 541.8(b) to include an additional 

sentence such as: ‘‘In considering a 

request for mitigation, refund, or waiver 

of fees, a common carrier shall consider 

that under 46 U.S.C. 41310(b) a common 

carrier shall bear the burden of 

establishing the reasonableness of any 

demurrage or detention charges.’’ 254

FMC response: The Commission has 

amended § 541.8(b) to: (1) require 

attempted resolution, rather than 

resolution, within 30 days; and (2) allow 

extension of the timeframe, if such a 

later date is agreed to by the parties. The 

Commission recognizes that this change 

will mean that the rule will no longer 

impose definite outer limits for closing 

out of a disputed transaction. These 

changes, however, further the goal of 

building better relationships in the 

demurrage and detention context 

between the billing and billed parties, 

the parties that know the most about the 

transaction. While parties can come to 

the Commission at any time during the 

process, the Commission wants to 

encourage to the fullest extent possible 

good-faith efforts for resolution between 

the parties when disagreements occur. 

We decline to formally define 

‘‘resolution’’ or ‘‘attempted resolution’’ 

because what these terms mean in any 

particular instance will be determined 

based upon mutual agreement of the 

involved parties. The Commission 

believes it is acceptable for some 

ambiguity, especially given that the 

Commission has removed the penalty of 

the billed party not having to pay the 

invoice if the parties do not come to a 

resolution. Applying the normal 

meaning of the word, resolution of a 

request includes payment by the billing 

party of any refund due to the billed 

party. 

As noted above, § 541.8 does not 

impact a party’s right to file a Charge 

Complaint with the Commission. Parties 

do not need to wait a certain period of 

time or for a triggering event to occur 

prior to filing a complaint under § 541.8. 

Parties interested in filing a Charge 

Complaints at the Commission may do 

so by following the Interim Procedures 

for Submitting ‘‘Charge Complaints.’’ 255

(c) Penalty 

Pacific Merchant Shipping 

Association (PMSA) argued that voiding 

an invoice is a harsh result.256 PMSA 

disagreed with the Commission’s 

conclusion that voiding a charge in its 

entirety is the only potential remedy of 

consequence that the Commission could 

establish, or that this penalty is 

consistent the Commission’s current 

practices or the Congressional mandates 

in OSRA 2022. PMSA stated that such 

a conclusion flies in the face of the 

Commission’s charge compliant process 

and argued that even if this penalty 

were intended to be punitive, it exceeds 

the congressional direction and 

authority granted to the Commission in 

OSRA 2022. PMSA noted that OSRA 

2022, at section 7(b), directs the 

Commission to conduct the present 

rulemaking in order to ‘‘further clarify 

reasonable rules and practices’’ 

regarding demurrage and detention, and 

to determine ‘‘which parties may be 

appropriately billed for any demurrage, 

detention, or other similar per container 

charges.’’ PMSA argued that Congress 

did not authorize the Commission to 

adopt new penalties whereby demurrage 

and detention charges would be 

eliminated as a punishment for violating 

a prohibited practice, and that the rule 

contravenes Congress’ wishes in this 

regard. 

Furthermore, PMSA argued that 

because the Charge Complaint process is 

available to any billed party, § 541.8(b) 

could have been set up in any number 

of more reasonable and less punitive 

ways to address a non-responsive billing 

party and still be within the scope of 

clarifying the process, such as 

introducing a rebuttable presumption 

against a non-responsive billing party or 

foreclosing certain defenses against a 

non-responsive billing party in the 

Complaint process. 

FMC response: In consideration of 

these concerns, the Commission has 

removed the provision from § 541.8(b) 

that allows the billed party to avoid 

paying the invoice if the dispute is not 

resolved within 30 days. Although that 

provision had been added to speed up 

and incentivize the dispute resolution 

process, this was not a requirement that 

was mandated by OSRA 2022. By 

contrast, the rule keeps the requirement 

of 46 U.S.C. 41104(d)(1) and codified in 

46 CFR 541.5, regarding voiding an 

invoice that does not include the 

necessary information, because this 

requirement was mandated by OSRA 

2022. 

(d) Release of Cargo During Dispute 

Issue: The Commission received a few 

comments concerning the ability to hold 

cargo as a lien against demurrage and 

detention invoices when an invoice is 

disputed. Commenters were concerned 

not only about the cargo that is the 

subject of a dispute but also about the 

potential for lockouts of non-related 

cargo. 

Mediterranean Shipping Company 

argued that cargo that is the subject of 

a disputed demurrage or detention 

invoice should be permitted to be 

maintained by the billing party pending 

payment.257 FedEx Trade Networks 

argued, in contrast, that when a 

demurrage or detention charge is in 

dispute, the billing party should be 

required to release the cargo that is the 

subject of a disputed charge.258


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14353 

259FMC–2022–0066–0228. 

260FMC–2022–0066–0188. 

261FMC–2022–0066–0259. 

262FedEx Trade Networks Transport & Brokerage, 

Inc. (FMC–2022–0066–0165). 

263See Norfolk Southern Railway Co. v. Kirby, 

543 U.S. 14; see also Mitsui O.S.K. Lines Ltd. v. 

Global Link Logistics, Inc., Olympus Partners, 

Olympus Growth Fund III, L.P, Louis J. Mischianti, 

David Cadenas, Keith Heffernan, CJR World 

Enterprises, Inc. and Chad J. Rosenberg (2011 WL 

7144008 (F.M.C.) January 30, 2014). 

264FMC–2022–0066–0180. 

265FMC–2022–0066–0267. 

266FMC–2022–0066–0217. 

267https://www.fmc.gov/industry-oversight/ 

national-shipper-advisory-committee/. 

268See 46 U.S.C. 40901–40904, 41104, 41106. 

269 543 U.S. at 18–19. 

270 Id. at 24 (internal citations omitted). 

A third alternative was proposed by 

Consumer Technology Association.259

CTA argued that during a dispute 

resolution period, the billing party 

should be required to release the billed 

party’s property so long as the billed 

party pays the undisputed portion of an 

invoice. 

The joint comment of the Meat Import 

Council of America and North America 

Meat Institute said that it is a common 

practice by VOCCs to hold additional, 

unrelated cargo from being released 

until all outstanding invoices are paid, 

even when the receiving party may be 

contesting the validity of those original 

invoices.260

MICA/NAMI said that when invoiced 

charges are contested by the receiving 

party, it is unacceptable for VOCCs to 

‘‘lock out’’ that entity from all future 

business with the VOCC until those 

outstanding fees are paid. MICA/NAMI 

argued that the current practice does not 

comport with the tenets of the Incentive 

Principle, and that allowing it to 

continue would dissuade importers and 

exporters, as well as third party service 

providers, from availing themselves of 

any dispute settlement mechanisms that 

are available given the need to service 

other, unrelated loads with the VOCC. 

The Retail Industry Leaders 

Association echoed similar concerns of 

MICA/NAMI, stating that a common 

complaint among its members is the 

practice of ocean common carriers and 

MTOs refusing to provide additional 

bookings to a BCO unless the BCO or 

another entity in the supply chain pays 

outstanding detention and demurrage 

charges that are under dispute.261

According to RILA, this practice is often 

used as a way of forcing a BCO to 

abandon a dispute with the carrier or 

MTO and pay the charges due. The 

Association noted that this practice 

could take several forms, including a 

demand for payment upon receipt of an 

invoice. The Association expressed its 

concern that this practice could be used 

to circumvent the text and purpose of 

the rule and recommended that the 

Commission thus prohibit it. 

FMC response: This rule does not 

impact traditional cargo lien rights. This 

rule allows billing parties to make their 

own business decisions about whether 

or not they require demurrage and 

detention charges to be paid prior to 

releasing cargo or whether or not to 

release cargo conditionally or 

unconditionally. 

The Commission does not believe that 

leaving the issue of not allowing 

additional bookings unaddressed will 

result in circumvention of the rule. The 

main purpose of this rule is to provide 

clarity and transparency of invoices and 

the billing process. This rule also 

eliminates the practice of issuing 

invoices to multiple parties in the hopes 

that one of them will pay it, which was 

one of the concerns raised by RILA. 

I. Rail 

1. Through Bill of Lading 

Issue: One NVOCC/OTI requested that 

the Commission explicitly state in 

§ 541.2 whether the rule applies 

demurrage and detention billing 

originating from the rail for the rail leg 

of a through bill of lading.262

FMC response: Ocean cargo that is 

shipped under a through bill of lading 

to a final destination in the United 

States remains under Commission 

jurisdiction for any Shipping Act 

violations, including violations 

occurring under OSRA 2022, and 

associated implementing regulations.263

These cases are discussed in greater 

detail below. 

2. Storage and Demurrage Fees for 

Shipments Moving on Through Bill of 

Lading 

Issue: National Customs Brokers & 

Forwarders Association of America, Inc. 

requested guidance as to whether the 

proposed definition of ‘‘demurrage and 

detention’’ would cover certain storage 

or demurrage fees for shipments moving 

on through bills of lading.264 Two other 

commenters, John S. Connor, Inc.265 and 

CV International,266 specifically 

requested that inland rail be included in 

the definition of ‘‘demurrage and 

detention’’ to account for storage at 

inland rail terminals. 

FMC response: The Commission 

declines to make a specific addition to 

the definition of ‘‘demurrage and 

detention’’ to add inland rail. This is an 

issue that has been raised in the 

National Shipper Advisory Committee 

(NSAC) and continues to be examined 

by the Commission.267 The Commission 

has direct jurisdiction over common 

carriers, marine terminal operators 

(MTOs), and ocean transportation 

intermediaries (OTIs).268 This includes 

jurisdiction over ‘‘through 

transportation,’’ meaning continuous 

transportation between the origin and 

destination and is offered or performed 

by one or more carriers, at least one of 

which is a common carrier under the 

Shipping Act. As such, ocean cargo that 

is shipped under a through bill of lading 

to a final destination in the United 

States remains under Commission 

jurisdiction for any Shipping Act 

violations. The Commission has long 

held that its jurisdiction extends to 

ocean cargo that is shipped under a 

through bill of lading to a final 

destination in the United States. The 

Supreme Court addressed this issue in 

Norfolk Southern Railway Co. v. Kirby, 

543 U.S. 14 (2004), which held that 

inland transportation pursuant to a 

through bill of lading does not change 

the fact that the bill of lading is a 

maritime contract. This case addressed 

the delivery of machinery from 

Australia to Huntsville, Alabama, on a 

through bill of lading. The machinery 

arrived in Savannah, Georgia, by way of 

an ocean vessel, where it was 

discharged and loaded onto a train 

whose ultimate destination was the 

inland port of Huntsville. The train 

derailed en route to Huntsville, causing 

damage to the machinery.269 The 

Supreme Court decided Norfolk 

Southern Railway Co. under admiralty 

law even though the machinery’s 

damage arose from the train crash 

because the inland rail portion was 

pursuant to through bills of lading, 

which the court noted were ‘‘essentially, 

contracts’’ for the transportation of the 

goods. These bills of lading were 

‘‘maritime contracts because their 

primary objective is to accomplish the 

transportation of goods by sea from 

Australia to the eastern coast of the 

United States.’’ 270

This principle has become settled in 

Commission case law decided under the 

Shipping Act. For example, in Mitsui 

O.S.K. Lines Ltd. v. Global Link 

Logistics, Inc., Olympus Partners, 

Olympus Growth Fund III, L.P, Louis J. 

Mischianti, David Cadenas, Keith 

Heffernan, CJR World Enterprises, Inc. 

and Chad J. Rosenberg, the Commission 

stated that the Shipping Act of 1984’s 

legislative history specifically 

recognized intermodalism ‘‘as an 

important component of ocean 

transportation, and the implications of 

intermodalism for ocean transportation 


khammond on DSKJM1Z7X2PROD with RULES3
14354 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

271 2011 WL 7144008 (F.M.C.) January 30, 2014. 

272 Id. at 6, citing H.R. REP. NO. 98–53, pt. 1, at 

13 (1983). 

273 Id. at 6, citing H.R. REP. NO. 98–53, pt. 1, at 

29. 

274 Id. at 6. 

275CV International, Inc. (FMC–2022–0066– 

0217). 

276Ocean Carrier Equipment Management 

Association, Inc. (FMC–2022–0066–0257). 

277 87 FR 62341, 62356. 

278Ocean Carrier Equipment Management 

Association, Inc. (FMC–2022–0066–0257). 

279Regulations.gov, Docket FMC–2022–0066 and 

https://www.reginfo.gov/public/do/PRAView

ICR?ref_nbr=202210-3072-001# (last visited June 

12, 2023). 

280FMC–2022–0066–0265. 

281FMC–2022–0066–0178. 

282FMC–2022–0066–0118. 

were addressed.’’ 271 In particular, the 

legislative history ‘‘recognized that an 

ocean carrier’s use of a single 

intermodal tariff could save shippers 

time and allow them to avoid having to 

arrange the transfer of cargo from one 

transportation mode to another.’’ The 

legislative history further stated that 

‘‘when an ocean carrier offers an 

intermodal service, that carrier has the 

single responsibility for assuring the 

delivery of cargo from point to point, 

and only that carrier needs to be 

concerned with the arrangements for 

transferring the cargo between modes. 

Furthermore, this process involves a 

single bill-of-lading rather than multiple 

bills of lading.’’ 272

In Mitsui, the Commission also stated 

that ‘‘the intermodal nature of ocean 

transportation was reflected in the 

[Shipping] Act’s inclusion of definitions 

of ‘through rate’ and ‘through 

transportation,’ ’’ which were ‘‘in 

recognition of the need to permit the 

employment of modern intermodalism 

concepts and practices in our foreign 

trade.’’ 273 As such, the Commission 

concluded that ‘‘given this legislative 

history, it appears that Congress 

intended to extend the Commission’s 

jurisdiction to encompass through rates 

and through transportation. Congress 

specifically noted the use by ocean 

carriers of single intermodal bills of 

lading, such as those involved in this 

case, to cover shipments going to inland 

destinations or points.’’ 274

Given this discussion, it remains the 

Commission’s position that it has 

jurisdiction over ocean cargo that is 

shipped under a through bill of lading 

to a final destination in the United 

States. This rulemaking does not change 

the Commission’s authority over 

merchandise carried pursuant to a 

through bill of lading. 

3. Amending the Definition of 

‘‘Demurrage and Detention’’ 

Issue: One commenter requested that 

the Commission add ‘‘storage’’ to the 

definition of ‘‘demurrage and 

detention,’’ as well as including rail/ 

inland depot space in the definition.275

There, the commenter reasoned that on 

through bills of lading, the VOCC is 

responsible for transporting cargo 

inland via rail, and that the same 

demurrage and detention billing 

regulations should apply to rail storage/ 

demurrage. 

FMC response: The Commission 

declines to add storage to the definition 

of ‘‘demurrage and detention.’’ The 

terms ‘‘detention and demurrage’’ are 

used extensively in the shipping 

industry, and they are not generally 

defined within the industry to include 

‘‘storage.’’ Expanding the definition to 

include ‘‘storage’’ is beyond the scope of 

this rulemaking. 

J. Paperwork Reduction Act 

Issue: One commenter asserted that 

the Commission violated the Paperwork 

Reduction Act of 1995 (PRA) because ‘‘it 

does not appear that any effort was 

made to realistically assess the time or 

cost burdens imposed by the rule[.]’’ 276

FMC response: The Commission 

complied with PRA requirements. In 

accordance with 5 CFR 1320.11, in the 

NPRM, the Commission discussed costs 

associated with the information 

collection outlined in the proposed rule, 

and the bases for those costs.277 The 

Commission requested comments on the 

information collection generally, and 

specifically requested comments on the 

accuracy of the burden estimate. Neither 

the commenter 278 nor anyone else 

submitted a comment on the proposed 

information collection. While some 

commenters on the NPRM, particularly 

MTOs, generally asserted concerns 

about potential burdens that the rule 

would impose on them, neither this 

particular commenter nor any other 

commenter provided data or 

information to the Commission that 

directly challenged the FMC’s burden 

calculation or provided additional 

information to improve the calculation 

estimate.279

K. Miscellaneous Comments 

1. Requests for Additional Regulations 

Issue: While many commenters 

expressed support for this rulemaking, a 

number of them mentioned items they 

thought required further action by the 

Commission. In particular, the Cheese 

Importers Association of America 

(CIAA) noted that even with the 

regulation’s change to billing practices, 

there are operational practices that are 

still harming food importers.280 This 

included charging detention and 

demurrage even when parties cannot 

access their shipping containers, when 

the ship did not go to the proper port, 

and when the carrier failed to properly 

notify that the container was available 

for pick up. CIAA requested that the 

Commission develop a reasonable 

standard regarding delivery practices. 

Similarly, the Northwest Horticultural 

Council (NHC) stated that the 

Commission should take further action 

to clarify reasonable detention and 

demurrage practices and make sure 

shippers are not unreasonably charged 

in situations where delays are beyond 

their control, an issue that was echoed 

in a comment by an anonymous 

exporter.281 This exporter also noted 

that a number of issues regarding 

earliest return dates could be ripe for 

Commission regulation. 

Pacifica Trucks LLC stated that in 

addition to the invoicing rules that this 

regulation encompasses, the 

Commission should address ocean 

carriers’ application of demurrage and 

detention fees in other situations that 

Pacifica Trucks considers unfair.282 In 

particular, Pacifica Trucks opined that 

the Commission should ban ocean 

carriers from assessing demurrage and 

detention fees in the following 

situations: when the carrier’s intermodal 

marine or terminal truck gate is closed; 

when the carrier’s intermodal marine or 

terminal does not offer unrestricted 

appointments to pick up cargo; when 

the motor carrier documents an 

unsuccessful attempt to make an 

appointment for either a loaded or 

empty container and no other 

unrestricted appointments were 

available; when the intermodal marine 

container terminal diverts equipment 

from the original interchange location 

without 48 hours’ notice to the motor 

carrier; when a loaded container is not 

available for pickup when the motor 

carrier arrives at the intermodal marine 

terminal, or the area containing the 

cargo is closed or inaccessible; when the 

intermodal marine terminal is too 

congested to accept the container and 

turns the motor carrier away; when the 

carrier’s intermodal marine terminal 

unilaterally imposes transaction 

restrictions such as chassis matching or 

empty container requirements that 

prevent a transaction and fail to provide 

a return location or other conditions 

that impede the motor carrier’s ability to 

pick up or return their containers. 

In addition, the Harbor Trucking 

Association requested Commission 

action on the return of empty 

containers, as well as standardizing 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14355 

283FMC–2022–0066–0261. 

284World Shipping Council (FMC–2022–0066– 

0242); National Association of Waterfront 

Employers (FMC–2022–0066–0276); Port Houston 

(FMC–2022–0066–0268). 

285See also 46 U.S.C. 41310(b) (Charge 

complaints authority states that Commission is 

required to investigate compliance with section 

41102 of ‘‘the charge’’ received and does not specify 

that multiple instances must be alleged for the 

Commission to investigate and order a refund and/ 

or civil penalty). 

286West Coast MTO Agreement (FMC–2022– 

0066–0229); Fenix Marine Services, Ltd. (FMC– 

2022–0066–0186). 

287West Coast MTO Agreement (FMC–2022– 

0066–0229). 

288CMA CGM (America) LLC (FMC–2022–0066– 

0183). 

289National Retail Federation (FMC–2022–0066– 

0231); National Industrial Transportation League 

(FMC–2022–0066–0277). 

payment practices such as payment 

centers having differing hours of 

operation, delays in payment processing 

and the need for consistency as to how 

free days are applied.283 Other 

commenters raised similar issues. 

FMC response: The Commission 

agrees that these are important issues 

but concludes that they are outside the 

scope of this rulemaking. The 

Commission thanks commenters for 

their thoughtful input on these issues. 

2. APA Challenge 

Issue: Three commenters asserted that 

the NPRM violates the Administrative 

Procedure Act (APA).284

The World Shipping Council argued 

that the proposed rule violates the APA 

‘‘because the Commission’s replacement 

of the Interpretive Rule and the 

Incentive Principle with a series of 

bright-line rules represents a clear 

departure from its past precedent on 

detention and demurrage without any 

reasonable explanation.’’ WSC 

elaborated, saying: 

[T]he Commission’s proposed bright-line 

regulations on which parties can be billed 

cannot logically coexist with its current 

policies under the Interpretive Rule, which 

employs a case-by-case analytical tool and 

the Incentive Principle to determine if a 

carrier, MTO, or OTI’s detention and 

demurrage billing practices are reasonable. 

The proposed rules and the Interpretive Rule 

cannot coexist because there are numerous 

instances when it is not only reasonable for 

carriers to take actions prohibited by this 

proposed regulation, but to do otherwise 

would disincentivize the fluid movement of 

freight through the supply chain. The 

predictable result is a proposal that is not 

only unworkable and unreasonable as a 

matter of policy, but per se arbitrary and 

capricious as a matter of law. 

The National Association of 

Waterfront Employers and Port Houston 

said that in contravention of 46 CFR 

545.4(b)’s requirement that an unjust 

and unreasonable practice must be 

something that occurs on a ‘‘normal, 

customary, and continuous basis,’’ this 

rule, as proposed would penalize MTOs 

for any isolated, one-off invoice 

omission, and apply the penalty to the 

entire invoice, including as to charges 

that may not be implicated by the 

mistake at issue. These commenters said 

that: ‘‘In effect, this regulation would be 

an implicit repeal of the existing 

regulatory definition of ‘‘unjust and 

unreasonable practices’’ under 46 CFR 

545.5 as it relates to MTO demurrage 

charges, without an opportunity for 

public comment on such repeal, as 

required by the APA.’’ 

FMC response: The Commission 

disagrees with the commenters’ 

characterization of this action and 

assertion of APA violations. The rule’s 

provisions have been extensively 

explained by the agency, and the rule is 

implemented by the Commission in 

accordance with the APA’s rulemaking 

procedures under 5 U.S.C. 553. As 

noted above, the Commission has twice 

solicited public input on the proposal to 

regulate MTO invoicing. The 

Commission stated unequivocally in the 

NPRM that MTOs would be subject to 

this rule. MTOs have had repeated 

public notice that the Commission was 

considering regulating MTO demurrage 

and detention invoicing, so the 

Commission disagrees with concerns 

that the rule lacked adequate public 

notice and comment. 

As for concerns that this rule 

implicitly overrules the Commission’s 

Interpretive Rule at 46 CFR 545.4, these 

concerns have also been previously 

addressed. Any argument about what 

parts of the Interpretive Rules at 46 CFR 

545.4 and 545.5 remain in force is 

inherently an argument about that 

guidance and not about whether this 

rule complies with the APA. OSRA 

2022 specifically required the 

Commission to issue rules under 46 

U.S.C. 41102(c) that further define the 

prohibited practices by common 

carriers, marine terminal operators, and 

shippers, regarding the assessment of 

detention or demurrage charges. The 

plain language of this direction and the 

plain language of 41104(d) do not 

require evidence of multiple violations. 

This view is further supported by 46 

U.S.C. 41104(f) which functions to void 

an invoice if a single required element 

is not included, not when the 

complainant can show multiple 

instances of such behavior.285 To the 

extent that this rule requires a change in 

the narrow context of the Commission’s 

guidance on how it will apply 46 U.S.C. 

41102(c) to MTO demurrage and 

detention invoicing, this rule merely 

implements changes made by Congress. 

In response to NAWE and Port 

Houston, the Commission has amended 

§ 541.5 to read ‘‘applicable charge’’ 

rather than ‘‘applicable invoice.’’ This 

change mirrors the statutory language of 

46 U.S.C. 41104(f). It was not the 

Commission’s intent to imply that a 

failure to include the mandatory invoice 

requirements related to detention and 

demurrage charges would void nondetention or demurrage charges that 

might appear on the same invoice. 

3. Extended Implementation Time 

Period 

Issue: The Commission received four 

requests for delayed implementation of 

the final rule. Two MTOs requested an 

implementation date of no less than 120 

days from publication of any final 

rule.286 The Intermodal Association of 

North America (IANA) requested no less 

than 90 days, saying that would be the 

minimum amount of time needed they 

would need to make necessary changes 

to the UIAA associated with 

implementation of § 541.7(a).287 The 

third MTO requested delayed 

implementation but did not propose a 

specific timeframe.288

FMC response: The agency is delaying 

the general effective date of this rule 90 

days from publication in the Federal 

Register and § 541.6’s implementation is 

delayed pending approval of the 

associated Collection of Information by 

the Office of Management and Budget. 

The Commission believes that the 

additional days of general 

implementation together with any 

additional waiting period for OMB 

approval of the Information Collection 

will provide industry with sufficient 

time to implement all changes required 

by this rule. 

4. Requests for Hearing and Additional 

Public Comment Period 

Issue: The Commission received two 

requests for a hearing so that the 

Commission could further hear from 

stakeholders about impacts and 

potential unintended consequences of 

implementing the rule.289

FMC response: After careful 

consideration, the Commission declines 

to establish another round of public 

comments or to hold the requested 

hearings. The Commission has already 

issued an ANPRM and an NPRM on this 

subject. As such, there have been two 

opportunities for public comments on 

these matters. As demonstrated by the 

number and quality of the comments 

received, the Commission believes that 

the ANPRM and the NPRM have 


khammond on DSKJM1Z7X2PROD with RULES3
14356 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

290TraPac, LLC (FMC–2022–0066–0136); 

National Association of Waterfront Employers 

(FMC–2022–0066–0276); Port Houston (FMC–2022– 

0066–0268). 

291 87 FR 62342, 62356 (Oct. 14, 2022). 

292E.g., Landstar Exp. Am., Inc. v. Fed. Mar. 

Comm’n, 569 F.3d 493, 495 (D.C. Cir. 2009). 

provided the public and interested 

parties with sufficient opportunity to 

comment on the underlying issues. As 

such, the Commission believes that a 

hearing or additional opportunity for 

public comment is unnecessary. In 

addition, the Commission is not making 

significant changes to the final 

regulations such that a Supplementary 

Notice of Proposed Rulemaking 

(SNPRM) would be warranted. 

5. Costs and Benefits Analysis 

Issue: Three commenters asserted that 

the Commission did not adequately 

assess costs and benefits of the proposed 

rule in the NPRM and that the 

Commission violated Executive Order 

13579.290

FMC response: The Commission 

provided an estimate of the costs for 

regulated entities to implement the 

proposed rule to be between $6.3 and 

$12.7 million.291 As discussed above 

with regards to comments concerning 

the Paperwork Reduction Act, the 

Commission did not receive information 

from these, or any other commenters, to 

support changing that estimate. The 

Commission highlights for the 

awareness of these commenters that, as 

an independent agency, the Commission 

is not subject to the same cost benefit 

analysis requirements as nonindependent agencies. Executive Order 

13579 was written taking into account 

the unique nature of independent 

agencies. The Executive Order does not 

require independent agencies to take 

specific actions, nor does it impose 

mandates on independent agencies to 

comply with Executive Order 12866, 

Executive Order 13563, or any other 

Executive order. 

IV. Summary of Final Rule and 

Changes From the NPRM 

§ 541.1 Purpose 

There are no changes from the text 

proposed in the NPRM. 

§ 541.2 Scope and Applicability 

This final rule makes minor changes 

to the text proposed in the NPRM. In 

paragraph (a), ‘‘to a billed party or their 

designated agent’’ has been removed. 

‘‘To a billed party’’ has been removed 

because part 541 also covers demurrage 

or detention invoices that are sent to 

persons who are not a ‘‘billed party’’ as 

defined in § 541.3. ‘‘Or their designated 

agent’’ has been removed as the text is 

unnecessary. Traditional rules of agency 

remain applicable under the Shipping 

Act.292 In paragraph (b), ‘‘regulation’’ 

has been replaced with ‘‘part.’’ 

‘‘Regulation’’ was a scrivener’s error in 

the proposed text. While ‘‘regulation’’ is 

sometimes used to describe a rule in 

totality, it more frequently is used to 

describe a single section or subsection 

of the Code of Federal Regulations. 

‘‘Part’’ is more precise and, most 

importantly, aligns with the Code of 

Federal Regulation’s organizational 

taxonomy. 

Part 541 governs any invoice issued 

by an ocean common carrier or nonvessel-operating common carrier for the 

collection of demurrage or detention 

charges. Part 541 does not govern the 

billing relationships among and 

between ocean common carriers and 

marine terminal operators. The 

Commission has not received 

information about the relationships or 

interactions between VOCCs and MTOs 

that warrants regulating the format used 

by MTOs to bill VOCCs. At the present 

time, the Commission is confident that 

the strong commercial relationships 

between the parties is enough to ensure 

that the proper information is shared 

and that the party who ultimately 

receives the invoice is receiving 

accurate information. Part 541 does 

apply to all other demurrage and 

detention invoices issued by MTOs. 

MTOs often do not have direct 

contractual relationships with shippers. 

However, MTOs are entitled to 

separately assess demurrage as an 

implied contract provided that it is 

published as part of an MTO Schedule 

and there are some situations where 

marine terminal operators impose fees 

directly on shippers and NVOCCs. A 

primary concern of the Commission is 

to ensure billed parties understand the 

demurrage or detention invoices they 

receive. Therefore, in those cases where 

an MTO charges any party other than a 

VOCC detention or demurrage charges, 

the Commission finds that MTOs should 

be subject to the same regulations that 

apply to VOCCs and NVOCCs. 

§ 541.3 Definitions 

This final rule makes three changes 

from the text proposed in the NPRM. 

‘‘Billing dispute’’ has been removed and 

‘‘consignee’’ and ‘‘person’’ have been 

added as defined terms. ‘‘Billing 

dispute’’ does not need to be defined 

because it is not a term used in 

§§ 541.4–541.99, in either the NPRM or 

final rule. 

Billed party. For purposes of part 541, 

‘‘billed party’’ means the person 

receiving the demurrage or detention 

invoice and who is responsible for 

payment of any incurred demurrage or 

detention charge. 

Billing party. For purposes of part 

541, ‘‘billing party’’ means the VOCC, 

NVOCC, or MTO who issues a 

demurrage or detention invoice. While 

in most cases, the billing party will be 

a VOCC, this term is defined broadly to 

incorporate the occasions when an MTO 

or an NVOCC may issue a demurrage or 

detention invoice. 

Consignee. The definition of 

‘‘consignee’’ that has been added to 

§ 541.3 comports with the definition of 

‘‘consignee’’ that appears in § 520.2. 

Demurrage or detention. ‘‘Demurrage 

or detention’’ includes any charge 

assessed by common carriers and 

marine terminal operators related to the 

use of marine terminal space or 

shipping containers. The scope of the 

term in § 541.3 is the same as the scope 

of ‘‘demurrage or detention’’ in 

§ 545.5(b). It encompasses all charges 

having the purpose or effect of 

demurrage or detention regardless of 

what those charges may be called by the 

billing party. The definition excludes 

charges related to equipment other than 

containers, such as chassis, because 

depending on the context, ‘‘per diem’’ 

can refer to containers, chassis, or both. 

Demurrage or detention invoice. For 

purposes of part 541, ‘‘demurrage or 

detention invoice’’ means any 

statement, printed, written, or accessible 

online, that documents an assessment of 

demurrage or detention charges. This 

broad definition includes all currently 

existing methods of invoicing shipping 

(e.g., email and online portal), as well as 

those that may be developed in the 

future. 

Person. The definition of ‘‘person’’ 

that has been added to § 541.4 aligns 

with § 515.2(n). 

§ 541.4 Properly Issued Invoices 

This final rule makes changes to the 

proposed § 541.4 text to allow 

consignees to be issued demurrage and 

detention invoices as an alternative 

billed party. The revised regulation 

makes clear that the consignee is an 

alternative billed party, and the same 

invoice may be not issued to both the 

shipper and the consignee. 

Additionally, the Commission has made 

minor, non-substantive changes that aid 

in clarity. 

If the billed party has firsthand 

knowledge of the terms of a 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 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14357 

293See, e.g., Norfolk Southern Railway Co. v. 

Kirby, 543 U.S. 14, 16 (2004) (‘‘[C]ontracts for 

carriage of goods by sea must be construed like any 

other contracts: by their terms and consistent with 

the intent of the parties’’); Contract, Black’s Law 

Dictionary (11th ed. 2019). 294E.g., 87 FR 62341, 62347. 

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. Therefore, under this final rule, 

a properly issued invoice is an invoice 

that is issued to: (1) the person that has 

contracted with the billing party for the 

ocean transportation or storage of cargo, 

or (2) the consignee (when in 

contractual privity with the carrier). 

In the final rule, the Commission has 

changed the word ‘‘goods’’ to ‘‘cargo’’ in 

§ 541.4(a)(1). ‘‘Cargo’’ is a broader term 

that puts the focus on the container, 

rather than the items inside it. As such, 

this comports with the rule’s focus on 

the container, as demurrage and 

detention charges are levied on the 

container rather than the items inside it. 

‘‘Contract’’ in this rule has its normal 

and ordinary legal meaning.293 Because 

contracts (other than contracts implied 

by law) require a meeting of the minds, 

merely listing a party on a bill of lading, 

or contract of affreightment, will not be 

sufficient for them to become a billed 

party for purposes of part 541 if they 

played no role in contracting for the 

ocean transportation or storage of cargo. 

Whether a meeting of the minds has 

occurred is something that can vary 

based on the specific circumstances of 

a given relationship. Because a contract 

can exist even if not memorialized in 

writing, the Commission declines to add 

a requirement that contracts need to be 

in writing for purposes of this rule. The 

Commission notes, however, that 

written contracts can provide important 

documentary evidence of agreement. 

Consignees may be billed as an 

alternative to the shipper when the 

consignee is the party contracting for 

the shipping and is therefore in 

contractual privity with the carrier. 

Merely listing the consignee on the bill 

of lading is not sufficient to support 

billing the consignee. (Conversely, 

although rarer, it is possible to properly 

issue an invoice to a consignee that has 

not been listed on the bill of lading.) 

This rule does not prohibit or 

otherwise limit an MTO from issuing 

any party—including BCOs or Motor 

Carriers—an invoice based on a 

Terminal Schedule, including charges 

for detention or demurrage, if the 

Terminal Schedule includes such 

charges and the Schedule has been 

made available in accordance with 46 

CFR 525.3. As noted by the commenters, 

46 U.S.C. 40501(f) and 46 CFR 

525.2(a)(2) establish that such 

Schedules are enforceable as implied 

contracts. Under such a scenario, a 

Motor Carrier has a contractual 

relationship with the MTO and the 

terms of the contract (the Schedule) are 

known to the Motor Carrier in advance 

by operation of 46 CFR 525.3. This is a 

very different situation than where a 

Motor Carrier is billed for demurrage or 

detention and the Motor Carrier has no 

contractual relationship with the billing 

party and is not privy to the specifics of 

the contractual agreement (such as 

where a Motor Carrier is billed 

demurrage or detention based on an 

agreement between a shipper and a 

billing party). 

This rule does require that when an 

MTO issues a bill for demurrage or 

detention for purposes of enforcing a 

Terminal Schedule, the billing must 

comply with part 541, including 

providing all the information required 

by § 541.6. The Commission recognizes 

that this may require MTOs to revise 

their current business practices. As 

discussed in the NPRM, the 

Commission’s primary concern with 

this rule is to ensure that billed parties 

understand the demurrage or detention 

invoices they receive.294 Any additional 

burden on MTOs to be able to provide 

the necessary data, which the 

Commission does not believe will be 

unduly burdensome, is outweighed by 

the benefits of transparency. 

The Commission notes that other 

MTO billing relationships are also 

subject to part 541. For example, an 

MTO issuing a demurrage or detention 

invoice in order to collect on behalf of 

a VOCC or issuing a demurrage or 

detention invoice to an NVOCC must 

comply with part 541. However, MTOs 

sometimes require BCOs or their agents 

to pay freight charges prior to removal 

of cargo and those freight charges are 

excluded from the definition of 

‘‘demurrage and detention’’ in § 541.3. 

§ 541.5 Failure To Include Required 

Information 

Under 46 U.S.C. 41104(f), failure to 

include any of the required minimum 

information in 46 U.S.C. 41104(d) 

eliminates the obligation of the charged 

party to pay the applicable charge. 

Section 541.5 is intended to mirror this 

requirement. To clarify that intent, the 

Commission has changed the paragraph 

from ‘‘applicable invoice’’ in the NPRM 

to ‘‘applicable charge’’ in this final rule. 

It was not the agency’s intent to imply 

that non-demurrage or detention charges 

could be voided by failure to include 

the information in § 541.6. 

Similarly, pursuant to 46 U.S.C. 

41102(c), it is a prohibited practice for 

an MTO to fail to include the required 

minimum information in a demurrage 

and detention invoice sent to a party 

other than a VOCC. Sending incomplete 

bills that do not contain sufficient 

information for shippers to verify if the 

bills received are accurate would not 

constitute having just and reasonable 

practices relating to or connected with 

receiving, handling, storing or 

delivering property. Extending the 

elimination of charge obligations 

provision at 46 U.S.C. 41104(f) to MTOs 

issuing demurrage and detention 

invoices would enforce Congress’ intent 

to have the Commission ‘‘further define 

prohibited practices by . . . marine 

terminal operators, . . . under section 

41102(c) of title 46, United States Code, 

regarding the assessment of demurrage 

or detention charges’’ and ensure that 

all demurrage and detention bills sent to 

billed parties provide the necessary 

information for the bills to be paid or 

disputed quickly thereby ensuring 

efficiency across the shipping system. 

§ 541.6 Contents of Invoice 

This final rule makes minor changes 

to the proposed requirements regarding 

digital notification of how a billed party 

can request fee mitigation, refund, or 

waiver as well as minor, nonsubstantive changes to align language 

with OSRA 2022 and the defined terms 

in § 541.3. 

The Commission has made changes 

throughout the regulation to align the 

text to the defined terms in § 541.3. 

‘‘Invoice’’ has been replaced with 

‘‘demurrage or detention invoice.’’ 

‘‘Billing date’’ and ‘‘billing due date’’ 

have been changed to ‘‘invoice date’’ 

and ‘‘invoice due date.’’ Finally, 

‘‘invoiced party’’ has been changed to 

‘‘billed party.’’ 

In response to comments, the 

Commission has added language that 

clearly specifies that the information 

submitted on the invoice must be 

accurate. Inclusion of the language 

aligns with the language used in 46 

U.S.C. 41104(d)(2). 

The Commission has amended the 

introductory sentences of paragraphs 

(a), (b), and (c) to make clear that these 

are minimum information elements. 

Billing parties may include additional 

information on the invoices and are 

encouraged to do so if they believe that 

such information will be useful to billed 

parties in verifying the validity of 

demurrage and detention charges. 


khammond on DSKJM1Z7X2PROD with RULES3
14358 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

295 Industry Advisory—Interim Procedures for 

Submitting ‘‘Charge Complaints’’ Under 46 U.S.C. 

41310—Federal Maritime Commission—Federal 

Maritime Commission (fmc.gov) (posted July 14, 

2022) (https://www.fmc.gov/industry-advisoryinterim-procedures-for-submitting-chargecomplaints/). 

296 Id. 

The Commission has amended 

paragraph (c)(2) by adding terminal 

schedule to the listed examples of 

documents, and changing ‘‘i.e.,’’ to 

‘‘e.g.,’’ to reflect that this is not an 

exhaustive list of all possible 

documents. 

The Commission has amended 

paragraph (d)(2) to expand the means of 

digital notification to billed parties of 

what they need to do to successfully 

submit a fee mitigation, refund, or 

waiver request. The language in the 

proposed rule required that the invoice 

contain a URL address that directs the 

billed party to a publicly accessible 

website that provides the necessary 

information. This final rule has 

expanded that to any digital means, 

including QR codes, or digital 

watermarks. 

§ 541.7 Issuance of Demurrage and 

Detention Invoices 

This rule requires detention and 

demurrage invoices to be issued within 

specified timeframes. As the proposed 

timeframe language was ambiguous, in 

this final rule the Commission has 

clarified that all ‘‘days’’ in the 

regulation are calendar days. 

The Commission is retaining the 

requirement as proposed in the NPRM 

that, generally, all demurrage and 

detention invoices must be issued in 30 

days. The Commission has removed the 

language ‘‘required timeframe’’ from the 

version of § 541.7(a) that appeared in 

the NPRM in order to make this 

subsection clearer. The Commission has 

revised this subsection to more 

explicitly dictate the required timing for 

purposes of clarity. 

In response to comments received 

during the NPRM, the Commission has 

revised § 541.7 to allow an exception for 

NVOCCs. That exception is located in 

paragraph (b) in this final rule. NVOCCs 

must issue demurrage and detention 

invoices within 30 days from the 

issuance date of the demurrage or 

detention invoice it received. If a billing 

party does not issue a demurrage or 

detention invoice within the required 

timeframe, then the billed party is not 

required to pay the charge. Paragraph (c) 

has been added to reflect situations 

where an NVOCC is acting as both a 

billing and billed party in relation to the 

same charge, and allows the NVOCC to 

inform its billing party that the charge 

has been disputed by the NVOCC’s 

billed party. In that circumstance, the 

NVOCC must provide an additional 30 

days for the NVOCC to dispute the 

charge upon notice. 

The final language of § 541.7(d) has 

removed the link between a billing party 

reissuing an invoice with an incorrectly 

billed party’s disputing of that invoice. 

This is consistent with the incentive 

present in the rest of the rule. The 

burden of issuing a correct invoice 

should not rely on an incorrectly billed 

party to dispute the incorrect invoice. 

Removing this link is also consistent 

with several comments that requested 

removing the 60-day requirement from 

§ 541.7(d), which applied to bills sent to 

a correctly billed party following the 

billing of an incorrect party. Section 

541.7(d) now gives a billing party 30 

calendar days to issue a corrected 

invoice, which is consistent with the 

rule’s purpose of a swift timeline for 

demurrage and detention billing. 

The NPRM’s linking a billing party’s 

ability to reissue an invoice with an 

incorrectly billed party’s disputing that 

invoice also caused confusion as to 

whether there was any interplay 

between § 541.7 and § 541.8. The 

changes to the rule text adopted in this 

final rule make clear that § 541.7 spells 

out the rules for issuing an invoice to 

the correctly billed party. By contrast, 

§ 541.8 speaks to a process that assumes 

the invoice was sent to the correct party, 

as the term ‘‘billed party’’ encompasses 

the fact that it is the correct party. 

§ 541.8 Requests for Fee Mitigation, 

Refund, or Waiver 

This rule requires billing parties to 

allow at least 30 days for billed parties 

to submit a fee mitigation, refund, or 

waiver request. The Commission has 

retained the NRPM’s proposal that if 

such a request is submitted by the billed 

party, the billing party must resolve the 

request within 30 days. However, based 

on public comments, the Commission 

has allowed an exception. A request for 

fee mitigation, refund, or waiver may be 

resolved later than 30 days if both 

parties agree to the later date. The 

Commission has added language to 

clarify that the timeframes in the 

regulation are calendar days. Also based 

on public comment, the Commission 

has removed the penalty provision 

proposed in the NPRM that 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. This 

proposed penalty provision is not a 

requirement of OSRA 2022. 

Section 541.8 does not impact a 

party’s right to file a Charge Complaint 

with the Commission. Parties do not 

need to wait a certain period of time or 

for a triggering event to occur prior to 

filing a complaint. Parties interested in 

filing a Charge Complaints at the 

Commission may do so by following the 

steps outlined on the Commission’s 

website.295

When the Commission receives 

sufficient information, it will promptly 

initiate an investigation.296

TABLE 1—CHANGES FROM NRPM TO FINAL RULE

Section Paragraph Change from NPRM Reason 

541.2 Scope and applicability ........................ (a) ........................

(b) ........................

Removes ‘‘to a billed party or their 

designated agent’’.

Changes ‘‘regulation’’ to ‘‘part’’ .........

Language unnecessary. 

Correction of scrivener’s error. 

541.3 Definitions ............................................. ‘‘Billing dispute’’ ... Definition removed ............................ Language unnecessary. Correction 

of scrivener’s error. Term not used 

in §§ 541.4–541.99. 

‘‘Consignee’’ ........ Definition added ................................ Final Rule allows consignees to be 

an alternative billed party. 

‘‘Person’’ .............. Definition added ................................ Clarification. 

541.4 Properly issued invoices ...................... (a) ........................ Paragraph divided into subparagraphs (a)(1) and (2); consignees 

listed as an alternative billed party.

Final Rule allows consignees to be 

an alternative billed party. 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14359 

TABLE 1—CHANGES FROM NRPM TO FINAL RULE—Continued 

Section Paragraph Change from NPRM Reason 

‘‘provided ocean transportation or 

storage’’ changed to ‘‘provided 

ocean transportation or storage of 

cargo’’.

The term ‘‘cargo’’ was added to put 

the focus on the storage of the 

container rather than the merchandise inside of it and to be consistent with the addition of the 

term in the second clause. 

‘‘for the carriage or storage of 

goods’’ changed to ‘‘for the ocean 

transportation or storage of cargo’’.

The term ‘‘goods’’ was changed to 

‘‘cargo’’ for a broader term that put 

the focus on the container rather 

than the merchandise inside it. 

(b) ........................ Language added stating that invoices cannot be issued to more 

than one party.

Clarification. 

(c) ........................ Formerly paragraph (b) ..................... Conforming amendment. 

541.5 Failure to include required information ‘‘invoice’’ changed to ‘‘charge’’ ......... Conforms regulatory language to 

statutory language. 

541.6 Contents of invoice .............................. Introductory paragraph.removed ............................................ Information incorporated into other 

paragraphs. 

(a) ........................ ‘‘The invoice’’ changed to ‘‘A demurrage or detention invoice’’.Correction of scrivener’s error. 

‘‘including’’ changed to ‘‘and at a 

minimum must include’’.

Clarification. 

In (a)(4), ‘‘invoiced party’’ changed to 

‘‘billed party’’.

Correction of scrivener’s error. 

‘‘must be accurate’’ added ................ Clarification. 

(b) ........................ ‘‘The invoice’’ changed to ‘‘A demurrage or detention invoice’’.Correction of scrivener’s error. 

‘‘including’’ changed to ‘‘and at a 

minimum must include’’.

Clarification. 

‘‘must be accurate’’ added ................ Clarification. 

In (b)(1) and (2) ‘‘billing date’’ 

changed to ‘‘invoice date’’.

Conforming change; elsewhere in 

the regulatory text ‘‘invoice’’ is 

used. 

(c) ........................ ‘‘The invoice’’ changed to ‘‘A demurrage or detention invoice’’.Correction of scrivener’s error. 

‘‘including’’ changed to ‘‘and at a 

minimum must include’’.

Clarification. 

‘‘must be accurate’’ added ................ Clarification. 

In (c)(2) ‘‘(i.e., the tariff name and 

rule number, applicable service 

contract number and section, or 

applicable negotiated arrangement)’’ changed to ‘‘e.g., the tariff 

name and rule number, terminal 

schedule, applicable service contract number and section, or applicable negotiated arrangement)’’.

Clarification/Correction of scrivener’s 

error. Adds terminal schedule to 

the list of examples and clarifies 

that this is a non-exhaustive set of 

examples. 

(d) ........................ ‘‘The invoice’’ changed to ‘‘A demurrage or detention invoice’’.Correction of scrivener’s error. 

‘‘including’’ changed to ‘‘and at a 

minimum must include’’.

Clarification. 

In (d)(2), ‘‘The URL address’’ 

changed to ‘‘Digital means, such 

as a URL address, QR code, or 

digital watermark, that directs the 

billed party to’’; ‘‘portion of the billing party’s website’’ removed.

Expands the means of digital notification. 

(e) ........................ ‘‘The invoice’’ changed to ‘‘A demurrage or detention invoice’’.Correction of scrivener’s error. 

‘‘must be accurate’’ added ................ Clarification. 

541.7 Issuance of demurrage and detention 

invoice.

(a) ........................ ‘‘30 days’’ changed to ‘‘thirty (30) 

calendar days’’.

Clarification. 

‘‘demurrage or detention invoices’’ 

changed to ‘‘a demurrage or detention invoice’’.

Correction of scrivener’s error. 

In the second sentence ‘‘the required 

timeframe’’ changed to ‘‘thirty (30) 

calendar days from the date on 

which the charge was last incurred’’.

Clarification. 


khammond on DSKJM1Z7X2PROD with RULES3
14360 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

TABLE 1—CHANGES FROM NRPM TO FINAL RULE—Continued 

Section Paragraph Change from NPRM Reason 

(b) ........................ New paragraph added ...................... Clarifies timeframe for NVOCCs 

passing through demurrage and 

detention charges to issue their 

own invoices. 

(c) ........................ New paragraph added ...................... Clarifies timeframe for NVOCCs 

when acting as both a billing and 

billed party in relation to the same 

charge. 

(d) ........................ Formerly paragraph (b) ..................... Conforming amendment. 

In the first sentence ‘‘the incorrect 

party’’ changed to ‘‘an incorrect 

person’’.

Correction of scrivener’s error and 

clarification to further distinguish 

an incorrectly issued invoice. 

‘‘days’’ changed to ‘‘calendar days’’ Clarification. 

In the NPRM, the correct billed party 

had to receive the invoice within 

30 days from the date of the dispute, but no later than 60 days 

after the charges were last incurred. The final rule instead imposes a strict 30-calendar-day 

deadline from when the charges 

were last incurred for the issuance 

of an invoice to a correct billed 

party, regardless of whether or not 

there may have been an invoice 

previously issued to an incorrect 

party.

Shifts burden to the billing party to 

issue accurate invoices. 

541.8 Requests for fee mitigation, refund, or 

waiver.

(a) ........................ Paragraph reworded ......................... Clarification. The paragraph has 

been re-worked for clarity. No substantive change from the NPRM; 

billing parties must still allow billed 

parties 30 days from when an invoice is issued to request mitigation, refund or waiver. Clarification 

that the timeframe is in calendar 

days. 

(b) ........................ ‘‘must resolve’’ changed to ‘‘must attempt to resolve’’.Change promotes good-faith efforts 

of billing and billed parties to work 

resolve disputes. 

‘‘30 days’’ changed to ‘‘thirty (30) 

calendar days’’.

Clarification. 

added ‘‘or at a later date as agreed 

upon by both parties’’ to the end 

of the first sentence.

Clarification. 

‘‘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.’’ removed.

Removes non-statutory penalty. 

V. Rulemaking Analyses and Notices 

A. 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. 

This final rule requires VOCCs, 

NVOCCs, and MTOs to include 

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, billing 

parties must issue demurrage and 

detention invoices within 30 calendar 

days from when charges stop accruing. 

See 87 FR at 27975–27976. 

The Commission presumes that 

VOCCs and MTOs generally do not 

qualify as small entities under the 

guidelines of the Small Business 

Administration (SBA). 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-calendar day deadline to issue 

an invoice from when demurrage and 

detention charges stop accruing could 

result in a loss of revenue to the billing 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14361 

297FMC–2022–0066–0162. 

298FMC–2022–0066–0278. 

party. In addition, 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 this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

B. Congressional Review Act 

The rule is not a ‘‘major rule’’ as 

defined by the Congressional Review 

Act (5 U.S.C. 801 et seq). The rule will 

not result in: (1) An annual effect on the 

economy of $100,000,000 or more; (2) a 

major increase in costs or prices; or (3) 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or the ability 

of United States-based companies to 

compete with foreign based companies. 

5 U.S.C. 804(2). 

C. 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 1500–1508) require it 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). After an 

environmental assessment, the 

Commission issued a Finding of No 

Significant Impact (‘‘FONSI’’), 87 FR 

73278 (Nov. 29, 2022), and explained 

that the FONSI would become final 10 

days after publication unless a petition 

for review was filed with FMC by Dec. 

9, 2022. (The World Shipping Council 

and Pacific Merchant Shipping 

Association jointly filed a petition for 

review on December 9, 2022.297 FMC 

denied the petition on January 6, 

2023.298). The FONSI and 

environmental assessment, as well as 

the petition and the Commission’s 

denial of the petition are available for 

inspection in the docket at 

www.regulations.gov. 

D. Paperwork Reduction Act 

This final rule calls for a collection of 

information under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520). As defined in 5 CFR 1320.3(c), 

‘‘Collection of Information’’ comprises 

reporting, recordkeeping, monitoring, 

posting, labeling, and other, similar 

actions. In compliance with the PRA, 

the Commission submitted the proposed 

information collection to the Office of 

Management and Budget. Notice of the 

information collections was published 

in the Federal Register and public 

comments were invited. 87 FR 62341, 

62356 (Oct. 14, 2022). Neither the 

Commission nor OMB received any 

comments that impacted the FMC’s 

burden calculation or provided 

additional information to improve the 

calculation estimate. 

The title and description of the 

information collections, a description of 

those who must collect the information, 

and an estimate of the total annual 

burden follow. The estimate covers the 

time for reviewing instructions, 

searching existing sources of data, 

gathering and maintaining the data 

needed, and completing and reviewing 

the collection. 

Title: 46 CFR Part 541—Demurrage and 

Detention Billing Requirements 

Summary of the Collection of 

Information: Title 46 U.S.C. 

41104(a)(15) and (d)(2), as well as 46 

CFR part 541 subpart A, 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 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. 

Need for Information: 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, 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 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. 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), we have submitted a copy of 

this rule to the Office of Management 


khammond on DSKJM1Z7X2PROD with RULES3
14362 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 

and Budget (OMB) for its review of the 

collection of information. Before the 

Commission may enforce the collection 

of information requirements in this rule, 

OMB must approve FMC’s request to 

collect this information. You need not 

respond to a collection of information 

unless it displays a currently valid 

control number from OMB. 

E. Executive Order 12988 (Civil Justice 

Reform) 

This rule meets the applicable 

standards in E.O. 12988, ‘‘Civil Justice 

Reform,’’ (61 FR 4729, Feb. 7, 1996) to 

minimize litigation, eliminate 

ambiguity, and reduce burden. 

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 amends title 46 of the CFR 

by adding part 541 to read as follows: 

■ 1. Add part 541 to read as follows: 

PART 541—DEMURRAGE AND 

DETENTION 

Sec. 

Subpart A—Billing Requirements and 

Practices 

541.1 Purpose. 

541.2 Scope and applicability. 

541.3 Definitions. 

541.4 Properly issued invoice. 

541.5 Failure to include required 

information. 

541.6 [Reserved] 

541.7 Issuance of demurrage and detention 

invoice. 

541.8 Requests for fee mitigation, refund, or 

waiver. 

541.9–541.99 [Reserved] 

Subpart B [Reserved] 

Authority: 5 U.S.C. 553; 46 U.S.C. 40101, 

40102, 40307, 40501–40503, 41101–41106, 

40901–40904, and 46105; and 46 CFR 515.23. 

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 

be adhered to when invoicing for 

demurrage or detention. 

§ 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 for the collection of 

demurrage or detention charges. 

(b) This part 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: 

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. 

Consignee means the ultimate 

recipient of the cargo; the person to 

whom final delivery of the cargo is to 

be made. 

Demurrage or detention mean any 

charges, including ‘‘per diem’’ charges, 

assessed by ocean common carriers, 

marine terminal operators, or nonvessel-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. 

Person means an individual, 

corporation, or company, including a 

limited liability company, association, 

firm, partnership, society, or joint stock 

company existing under or authorized 

by the laws of the United States or of a 

foreign country. 

§ 541.4 Properly issued invoices. 

(a) A properly issued invoice is a 

demurrage or detention invoice issued 

by a billing party to: 

(1) The person for whose account the 

billing party provided ocean 

transportation or storage of cargo and 

who contracted with the billing party 

for the ocean transportation or storage of 

cargo; or 

(2) The consignee. 

(b) If a billing party issues a 

demurrage or detention invoice to the 

person identified in paragraph (a)(1) of 

this section, it cannot also issue a 

demurrage or detention invoice to the 

person identified in paragraph (a)(2) of 

this section. 

(c) 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 

eliminates any obligation of the billed 

party to pay the applicable charge. 

§ 541.6 [Reserved] 

§ 541.7 Issuance of demurrage and 

detention invoices. 

(a) A billing party must issue a 

demurrage or detention invoice within 

thirty (30) calendar days from the date 

on which the charge was last incurred. 

If the billing party does not issue a 

demurrage or detention invoice within 

thirty (30) calendar days from the date 

on which the charge was last incurred, 

then the billed party is not required to 

pay the charge. 

(b) If the billing party is a non-vesseloperating common carrier, then it must 

issue a demurrage or detention invoice 

within thirty (30) calendar days from 

the issuance date of the demurrage or 

detention invoice it received. If such a 

billing party does not issue a demurrage 

or detention invoice within thirty (30) 

calendar days from the issuance date of 

the demurrage or detention invoice it 

received, then the billed party is not 

required to pay the charge. 

(c) A non-vessel-operating common 

carrier (NVOCC) can be both a billing 

and billed party in relation to the same 

charge. When an NVOCC is acting in 

both roles, it can inform its billing party 

that the charge has been disputed by the 

NVOCC’s billed party. The NVOCC’s 

billing party must then provide an 

additional thirty (30) calendar days for 

the NVOCC to dispute the charge upon 

this notice. 

(d) If the billing party invoices an 

incorrect person, the billing party may 

issue an invoice to the correct billed 

party provided that such issuance is 

within thirty (30) calendar days from 

the date on which the charge was last 

incurred. If the billing party does not 

issue this corrected demurrage or 

detention invoice within thirty (30) 

calendar days from the date on which 

the charge was last incurred, then the 

billed party is not required to pay the 

charge. 

§ 541.8 Requests for fee mitigation, 

refund, or waiver. 

(a) The billing party must allow the 

billed party at least thirty (30) calendar 

days from the invoice issuance date to 

request mitigation, refund, or waiver of 

fees from the billing party. 

(b) If a billing party receives a fee 

mitigation, refund, or waiver request 

from a billed party, the billing party 

must attempt to resolve the request 

within thirty (30) calendar days of 

receiving such a request or at a later 

date as agreed upon by both parties. 


khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations 14363 

§ 541.9–541.99 [Reserved] 

■ 2. Delayed indefinitely, add § 541.6 to 

read as follows: 

§ 541.6 Contents of invoice. 

(a) Identifying information. A 

demurrage or detention invoice must be 

accurate and contain sufficient 

information to enable the billed party to 

identify the container(s) to which the 

charges apply and at a minimum must 

include: 

(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 billed party 

is the proper party of interest and thus 

liable for the charge. 

(b) Timing information. A demurrage 

or detention invoice must be accurate 

and 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 and at a minimum 

must include: 

(1) The invoice date; 

(2) The invoice 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. A demurrage or 

detention invoice must be accurate and 

contain sufficient information to enable 

the billed party to identify the amount 

due and readily ascertain how that 

amount was calculated and must 

include at a minimum: 

(1) The total amount due; 

(2) The applicable detention or 

demurrage rule (e.g., the tariff name and 

rule number, terminal schedule, 

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. A demurrage 

or detention invoice must be accurate 

and 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, and at a minimum must 

include: 

(1) The email, telephone number, or 

other appropriate contact information 

for questions or request for fee 

mitigation, refund, or waiver; 

(2) Digital means, such as a URL 

address, QR code, or digital watermark, 

that directs the billed party to a publicly 

accessible 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 

(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. A demurrage or 

detention invoice must be accurate and 

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. 

■ 3. Delayed indefinitely, add § 541.99 

to read as follows: 

§ 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. The valid control number 

for this collection of information is 

3072–XXXX. 

Subpart B [Reserved] 

By the Commission. 

David Eng, 

Secretary. 

[FR Doc. 2024–02926 Filed 2–23–24; 8:45 am] 

BILLING CODE 6730–02–P 


khammond on DSKJM1Z7X2PROD with RULES3