[Federal Register Volume 87, Number 31 (Tuesday, February 15, 2022)]
[Proposed Rules]
[Pages 8506-8509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02981]


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FEDERAL MARITIME COMMISSION

46 CFR Chapter IV, Subchapter B

[Docket No. 22-04]
RIN 3072-AC90


Demurrage and Detention Billing Requirements

AGENCY: Federal Maritime Commission.

ACTION: Advance Notice of Proposed Rulemaking.

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SUMMARY: The Federal Maritime Commission (Commission) is issuing this 
Advance Notice of Proposed Rulemaking (ANPRM) to seek comment on 
whether the Commission should require common carriers and marine 
terminal operators to include certain minimum information on or with 
demurrage and detention billings. Also, the Commission is interested in 
receiving comments on whether it should require common carriers and 
marine terminal operators to adhere to certain practices regarding the 
timing of demurrage and detention billings. These changes were 
recommended by the Fact Finding Officer in Commission Fact Finding 29: 
International Ocean Transportation Supply Chain Engagement.

DATES: Submit comments on or before March 17, 2022.

ADDRESSES: You may submit comments, identified by Docket No. 22-04, by 
email at <a href="/cdn-cgi/l/email-protection#1360767061766772616a53757e703d747c65"><span class="__cf_email__" data-cfemail="acdfc9cfdec9d8cdded5eccac1cf82cbc3da">[email protected]</span></a>. For comments, include in the subject line: 
``Docket No. 22-04, Comments on Demurrage and Detention Billing 
Requirements ANPRM.'' Comments should be attached to the email as a 
Microsoft Word or text-searchable PDF document. Only non-confidential 
and public versions of confidential comments should be submitted by 
email.
    Instructions: For detailed instructions on submitting comments, 
including requesting confidential treatment of comments, and additional 
information on the rulemaking process, see the Public Participation 
heading of the Supplementary Information section of this document. Note 
that all comments received will be posted without change to the 
Commission's website unless the commenter has requested confidential 
treatment.
    Docket: For access to the docket to read background documents or 
comments received, go to the Commission's Electronic Reading Room at: 
https://www2.fmc.gov/readingroom/proceeding/22-04.

FOR FURTHER INFORMATION CONTACT: William Cody, Secretary; Phone: (202) 
523-5725; Email: <a href="/cdn-cgi/l/email-protection#97e4f2f4e5f2e3f6e5eed7f1faf4b9f0f8e1"><span class="__cf_email__" data-cfemail="1360767061766772616a53757e703d747c65">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Public Participation

How do I prepare and submit comments?

    Your comments must be written in English. To ensure that your 
comments are correctly filed in the docket, please include the docket 
number of this document in your comments.

[[Page 8507]]

    You may submit your comments via email to the email address listed 
above under ADDRESSES. Please include the docket number associated with 
this notice and the subject matter in the subject line of the email. 
Comments should be attached to the email as a Microsoft Word or text-
searchable PDF document. Only non-confidential and public versions of 
confidential comments should be submitted by email.

How do I submit confidential business information?

    The Commission will provide confidential treatment for identified 
confidential information to the extent allowed by law. If your comments 
contain confidential information, you must submit the following by 
email to the address listed above under ADDRESSES:
    <bullet> A transmittal letter requesting confidential treatment 
that identifies the specific information in the comments for which 
protection is sought and demonstrates that the information is a trade 
secret or other confidential research, development, or commercial 
information.
    <bullet> A confidential copy of your comments, consisting of the 
complete filing with a cover page marked ``Confidential-Restricted,'' 
and the confidential material clearly marked on each page. You should 
submit the confidential copy to the Commission by mail.
    <bullet> A public version of your comments with the confidential 
information excluded. The public version must state ``Public Version--
confidential materials excluded'' on the cover page and on each 
affected page and must clearly indicate any information withheld. You 
may submit the public version to the Commission by email or mail.

Will the Commission consider late comments?

    The Commission will consider all comments received before the close 
of business on the comment closing date indicated above under DATES. To 
the extent possible, we will also consider comments received after that 
date.

How can I read comments submitted by other people?

    You may read the comments received by the Commission at the 
Commission's Electronic Reading Room or the Docket Activity Library at 
the addresses listed above under ADDRESSES.

II. Background

    As rising cargo volumes have increasingly put pressure on common 
carrier, port and terminal performance, demurrage and detention charges 
have for a variety of reasons substantially increased. Demurrage and 
detention charges and policies should serve the primary purpose of 
incentivizing the movement of cargo and promoting freight fluidity.
    On July 28, 2021, Commissioner Rebecca F. Dye, the Fact Finding 
Officer for Fact Finding 29, recommended, among other things, that the 
Commission ``[i]ssue an ANPRM seeking industry views on whether the 
Commission should require common carriers and marine terminal operators 
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.'' \1\ The Fact Finding Officer 
noted that although the Commission had declined to prescribe specific 
billing practices in the April 2020 interpretive rule on demurrage and 
detention, 46 CFR 545.5, she remained concerned about demurrage and 
detention billing practices and about ensuring that it is clear to 
shippers ``what is being billed by whom'' so that they can understand 
the charges.\2\ The Commission approved the Fact Finding 29 
recommendation on September 15, 2021.\3\
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    \1\ See Fact Finding Investigation No. 29, Interim 
Recommendations at 6 (July 28, 2021), https://www2.fmc.gov/ReadingRoom/docs/FFno29/FF29%20Interim%20Recommendations.pdf/.
    \2\ Fact Finding Investigation No. 29, Interim Recommendations 
at 7, https://www2.fmc.gov/ReadingRoom/docs/FFno29/FF29%20Interim%20Recommendations.pdf/.
    \3\ Fed. Mar. Comm'n, Press Release, FMC to Issue Guidance on 
Complaint Proceedings and Seek Comments on Demurrage and Detention 
Billings (Sept. 15, 2021), https://www.fmc.gov/fmc-to-issue-guidance-on-complaint-proceedings-and-seek-comments-on-demurrage-and-detention-billings/.
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    In the development of its Interpretive Rule on Demurrage and 
Detention, the Commission discussed but did not adopt a particular 
billing model, or billing and invoice timeframes to incorporate into 
the analysis of what constitutes reasonable demurrage and detention 
policies.\4\ Since that time, the Commission has continued to receive 
complaints about billing practices and is now considering how and 
whether to address billing issues.
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    \4\ 85 FR 29638, 29662 (May 18, 2020).
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III. Discussion

A. Scope of ANPRM

    The Commission is seeking industry views on whether it should 
regulate the demurrage and detention billing practices of common 
carriers and marine terminal operators (MTO). For the purposes of this 
ANPRM, the Commission defines the terms ``demurrage and detention'' 
broadly to include any charges assessed by common carriers and marine 
terminal operators related to the use of marine terminal space or 
shipping containers. Under this definition, for instance, charges 
assessed by common carriers for the use of containers outside a marine 
terminal would fall within the scope of this ANPRM regardless of 
whether the charges are called ``detention'' or ``per diem.'' 
Similarly, charges assessed because a container is taking up terminal 
space would fall within the scope of this ANPRM even if the charges are 
called something other than ``demurrage.'' Therefore, the scope of this 
advance notice is any charges having the purpose or effect of demurrage 
or detention regardless of the labels given to those charges.\5\
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    \5\ The scope of this ANPRM does not include ocean freight bills 
or bills for charges that do not have the purpose of demurrage and 
detention, such as charges related to chassis, bunker, and 
documentation.
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    The Fact Finding 29 recommendation proposed regulating the billings 
and billing practices of both common carriers and marine terminal 
operators. There are two types of common carrier--vessel-operating 
common carriers (VOCCs) and non-vessel-operating common carriers 
(NVOCCs).\6\ As set forth below in Section IV, the Commission seeks 
comments on whether a proposed regulation on demurrage and detention 
billing should include NVOCCs as well as VOCCs, and to what extent any 
regulations should differ based on the type of entity involved.\7\
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    \6\ 46 U.S.C. 40102.
    \7\ The Commission does not seek comment on the ocean freight 
forwarder bills, as ocean freight forwarders, although ocean 
transportation intermediaries, are not common carriers. 46 U.S.C. 
40102.
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    Additionally, although the Fact Finding 29 recommendation suggested 
regulating MTO demurrage and detention billings, MTOs often do not have 
direct contractual relationships with shippers.\8\ Rather, marine 
terminal operators usually have contractual relationships with VOCCs, 
such as via terminal services agreements.\9\ However, under Commission 
regulations, MTOs are entitled to separately assess demurrage as an 
implied contract in a court of law, provided that it is published as 
part of a MTO schedule. Further, in the Interpretive Rule on demurrage 
and detention, the

[[Page 8508]]

Commission stated that its focus in that rulemaking was ``on practices 
related to charges imposed by regulated entities on shippers, 
intermediaries, and truckers, and not the contractual relationships 
between ocean carriers and marine terminal operators.'' \10\ There are 
some situations, however, where marine terminal operators do impose 
fees directly on shippers. The Commission thus seeks comments on where 
marine terminal operators impose fees directly on shippers, as well as 
whether and to what extent a proposed regulation on demurrage and 
detention billings should include MTOs.
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    \8\ See 85 FR at 29662. Publicly available MTO schedules are, 
however, enforceable as implied contracts without proof of actual 
knowledge of the schedule's provisions. 46 U.S.C. 40501(f).
    \9\ See 46 CFR 535.309.
    \10\ 85 FR at 29650.
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    The Commission is also aware that common carriers and marine 
terminal operators are subject to laws other than the Shipping Act, as 
well as private contractual arrangements such as the Uniform Intermodal 
Interchange Agreement (UIIA), which may implicate demurrage and 
detention billing. For instance, as the Commission noted in the 
Interpretive Rule, the standard UIIA agreement contains deadlines for 
equipment providers (e.g., VOCCs) to invoice truckers for containers 
and chassis.\11\ The Commission seeks comment on any other laws, 
regulations, or arrangements that may affect the regulation of 
demurrage and detention billing.
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    \11\ See, e.g., 85 FR 29662 n. 388.
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B. Minimum Billing Information

    The Commission is considering a requirement that bills for 
demurrage and detention charges contain certain minimum information. 
Although much of the information required may currently be included on 
bills already, certain additional information may be useful to ensure 
the accuracy, clarity, and visibility of charges, including identifying 
whether the bill is being issued to the correct party, identifying the 
appropriate time period for which demurrage and detention charges are 
being assessed, providing more concise information in the event a bill 
is disputed, and including information on how to access the dispute 
resolution process. Requiring such information may ultimately lead to 
fewer disputed bills and therefore streamline the demurrage and 
detention billing process.
    Accordingly, the Commission is requesting comments on what specific 
information it should require on demurrage and detention bills. In 
addition to information necessary to identify the shipment (bill of 
lading number, container number, etc.), the Commission is also 
requesting comments on whether bills should include information on how 
the charges are calculated. This could include, for example, 
identifying clear and concise container availability dates in addition 
to vessel arrival dates for import shipments; and, for export 
shipments, the earliest return dates (and any modifications to those 
dates) as well as the availability of return locations and 
appointments, where applicable. In addition, the Commission is 
requesting comments on whether the bills should include information on 
any events (e.g., container unavailability, lack of return locations, 
appointments, or other force-majeure reasons) which would justify 
stopping the clock on charges. Finally, since anecdotal reports 
indicate that bills may sometimes be sent to multiple parties for the 
same shipments, the Commission is seeking comment on whether it would 
be appropriate to require bills to specify all parties receiving the 
bill as well as to identify why the party receiving the bill is the 
proper party-in-interest and to identify the source of the charge 
(i.e., by tariff, service contract or MTO schedule).

C. Billing Practices

    The Commission is also considering requiring common carriers and 
MTOs to adhere to certain practices regarding the timing of demurrage 
and detention billings. The Commission is also interested in comments 
on whether similar requirements should be placed on the issuance of 
refunds.
    The Commission has previously received concerns from stakeholders 
regarding a lack of clearly defined timeframes for the issuance of 
bills.\12\ In response to the proposed rule on Interpretive Rule on 
Demurrage and Detention, the Commission received many comments 
asserting that ocean carriers and marine terminal operators should 
issue demurrage or detention bills within specific timeframes.\13\ In 
the Final Rule, the Commission determined not to take action, reserving 
the right to reconsider the issue on potential billing and invoice 
timeframes.\14\
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    \12\ See Fact Finding Investigation No. 28 Final Report, at 14 
https://www2.fmc.gov/readingroom/docs/FF%20No.%2028/FF-28_FR.pdf/.
    \13\ 85 FR 29638 at 29662.
    \14\ 85 FR 29638 at 29662.
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    However, the Commission has continued to receive anecdotal examples 
of delays in receiving demurrage or detention bills. The longer it 
takes to receive a demurrage or detention bill the more difficult it 
may be for a shipper to validate the accuracy of the charges. For 
example, if a shipper receives a demurrage or detention bill months 
after the occurrence of the charge, they may no longer possess the 
necessary materials to confirm the charges are correct or to access the 
information necessary to dispute the charges.
    The Commission is asking for comments on a requirement that 
demurrage or detention bills be issued within 60 days of the occurrence 
of the charge. The UIIA currently requires that invoices be issued 
within 60 days.\15\ The Commission is interested in the effectiveness 
of that UIIA timeframe and if a longer or shorter timeline would be 
appropriate.
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    \15\ ``Provider shall invoice Motor Carrier for Per Diem, 
Container Use, Chassis Use/Rental and/or Storage/Ocean Demurrage 
charges within sixty (60) days from the date on which Equipment was 
returned to Provider by Motor Carrier. If Motor Carrier is not 
invoiced within the established timeframe, the right of the Provider 
to recover such charges will be lost.'' Uniform Intermodal 
Interchange and Facilities Access Agreement (``UIIA'') at Section 
E.6(c). https://www.uiia.org/sites/default/files/documents/newuiia-Home.pdf.
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    The Commission is also seeking comments on whether similar timing 
requirements in the context of refunds would be beneficial. Again, the 
Commission has received anecdotal examples of refunds of demurrage and 
detention billings taking several months to be issued. The Commission 
is seeking comments on whether it should regulate the timeframe for 
refunds and what the timeframe should be.

IV. Information Requested

    Your responses to the following questions will help inform the 
Commission whether rulemaking or other Commission action is necessary. 
In responding to each question, please identify the question to which 
you are responding and explain your answer to each question. 
Additionally, please consider the type of information that VOCCs, 
NVOCCs, and MTOs currently provide with demurrage and detention bills, 
current demurrage and detention billing practices, and any relevant 
distinctions that should be made between VOCCs, NVOCCs, and MTOs with 
respect to billing information and practices. If your response to a 
question includes a monetary or numerical figure, please provide 
sufficient information and data to explain how the figure was 
calculated. Comments may also include any supplemental information 
relevant to billing requirements.
    A. Scope.
    1. Should the Commission include both VOCCs and NVOCCs in a 
proposed regulation on demurrage and detention billing?

[[Page 8509]]

    2. Should the Commission include MTOs in a proposed demurrage 
billing regulation?
    3. Should a proposed demurrage billing regulation distinguish 
between the demurrage MTOs charge to shippers and the demurrage MTOs 
charge to VOCCs? That is, should the Commission regulate the format in 
which MTOs bill VOCCs?
    4. What percentage of demurrage and detention bills contain 
inaccurate information, and which information is most often disputed?
    5. How much does the type of information included on or with 
demurrage and detention billings vary among common carriers, among 
marine terminal operators, and between VOCCs and NVOCCs?
    B. Minimum billing information.
    6. What type of information should be required on billings. Should 
the Commission require certain essential information included on 
invoices such as:

a. Bill of lading number
b. Container number
c. Billing date
d. Payment due date
e. Start/end of free time
f. Start/end of demurrage/detention/per diem clock
g. Demurrage/detention/per diem rate schedule
h. Location of the notice of the charge (i.e., tariff, service contract 
number and section or MTO schedule)
i. For import shipments:
i. Vessel arrival date
ii. Container availability date
j. For export shipments:
i. Earliest return date, including identifying any modifications to the 
earliest return date
k. Any intervening clock-stopping events, for example:
i. Unavailability of container
ii. Unavailability of pickup or return locations
iii. Unavailability of appointments (where applicable)
iv. Restrictions on chassis accepted
v. Force majeure-related events
l. Please note if any portion of the charge is a pass-through of 
charges levied by the MTO or Port.

    C. Billing practices.
    7. What information or timeframes should be required for VOCC and 
NVOCC demurrage and detention bills? Should the Commission require 
different types of information or timeframes?
    8. Do common carriers invoice multiple parties for demurrage and/or 
detention charges? If multiple parties are invoiced for charges, should 
the billing party be required to identify all such parties receiving an 
invoice for the charges at issue?
    9. Should the billing party be required to identify the basis of 
why the invoiced party is the proper party in interest and therefore 
liable for the charges? (i.e., as shipper, consignee, beneficial cargo 
owner, motor carrier or an agent, or as a party acting on behalf of 
another party pursuant to the common carrier's merchant clause in its 
bill of lading.)
    10. Should the Commission, for purposes of clarity and visibility 
of charges, require MTOs to bill demurrage directly to shippers (rather 
than billing VOCCs who then bill shippers for demurrage)? In that 
scenario, MTOs would bill shippers directly for demurrage, and carriers 
would continue to bill detention to shippers.
    11. How long from the point of accrual of a demurrage or detention 
charge does it typically take to receive a demurrage or detention 
invoice or billing?
    12. Should the Commission require demurrage and detention invoices 
to be issued within 60 days of date when the detention/demurrage/per 
diem stops accruing?
    13. Should the Commission require specific information be included 
on the invoice regarding how to dispute a charge? If so, what 
information should be required? For example, should the Commission 
require invoices to include contact information for disputing charges, 
identify circumstances for when a charge may be waived, or identify the 
billing parties' evidentiary requirements sufficient to support a 
waiver of the charges?
    14. How long from the point of dismissal of a charge does it 
typically take to receive a refund? Should the Commission require that 
refunds of demurrage or detention bills be issued within a certain time 
period and what should that timeframe be?
    15. How would a regulation on demurrage and detention billing 
requirements impact, conflict with, or preempt any other applicable 
laws, regulations, or arrangements (such as the UIIA)?
    16. Please provide any other views or data you believe would help 
inform the Commission's decision whether to pursue a proposed 
regulation on demurrage and detention billing information and 
practices.

    By the Commission.
William Cody,
Secretary.
[FR Doc. 2022-02981 Filed 2-14-22; 8:45 am]
BILLING CODE 6730-02-P


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