The Federal Maritime Commission is seeking public input on an Advanced Notice of Proposed Rulemaking in respect of carrier detention billing practices. This of course follows their May 2020 publication of an Interpretive Rule on Carrier Billing Practices and October 2020 call for submissions in respect of carrier merchant clauses.
The notice directs readers’ attention to particular issues that are being addressed in the rulemaking, including whether there should be requirements respecting the timing and content of detention notices.:
- What particular information should detention billings contain?
- What is the appropriate timing for issuing detention notices? Is the 60-day timeframe provided under the Universal Intermodal Interchange Agreement (UIIA) appropriate?
- Should rules governing billing of detention differ between VOCCs and NVOCCs?
- Where or when do terminal operators (MTO’s) impose charges directly on shippers/consignees rather than through carriers, and to what extent should the rulemaking capture these practices?
Noting that the UIIA 60-day period is counted from when detention *stops*, it is the author’s view that a much tighter timeframe is required both for commercial efficacy and for fairness. 60 days of detention will amount to well over USD$10,000 per container, and it seems clear that all parties to a transaction in which there is delay resulting in charges will want prompter notice of those charges, as well as the corresponding opportunity to mitigate the charges. Since most carriers begin accruing these charges after 72 hours, there is no commercial justification for delaying notice and billing by as much as two months.
Further, sixty days *after* detention stops accruing means that cargoes could sit for many months accruing charges far exceeding those from the first sixty days, and a carrier is only required to provide notice within 60 days after that period of many months ends, such that the invoicing could follow the event by a year or more. Accordingly it is my view that a timeframe much shorter than sixty days is appropriate and any such timeline should run from when detention charges *start* to accrue, not when they stop.
You may submit comments as a Microsoft Word or text-searchable PDF document attached in an email with subject “Docket No. 22-04, Comments on Demurrage and Detention Billing Requirements ANPRM” and directed to secretary@fmc.gov.