Background

The Ocean Shipping Reform Act of 2022 was signed into law June 16, and the Federal Maritime Commission has issued a notice stating that some provisions of this law became effective as of that date, including the following prohibitions.

- common carriers are prohibited from assessing any party for a charge that is inconsistent or does not comply with all applicable provisions and regulations, including 46 USC 41102(c) (regarding receiving, handling, storing, or delivery property) and 46 CFR Part 545 (regarding demurrage and detention and other issues)

- common carriers are prohibited from invoicing any party for demurrage or detention charges unless the invoice includes specified information showing that such charges comply with 46 CFR Part 545 and applicable provisions and regulations, including the principles of the FMC’s May 2020 final rule on unreasonable demurrage and detention charges

- common carriers must include 13 specific pieces of information on invoices for demurrage and detention charges (as set forth in 46 USC 41104(d))

An advisory opinion from the FMC’s general counsel (which notes that it does not constitute the judgment of the FMC or bind it in any subsequent matter) states that the above provisions apply (1) to any charge assessed or invoice issued by, or on behalf of or for the benefit of, a common carrier, (2) to both imports and exports, and (3) regardless of whether the charge is assessed or invoiced electronically or in paper form. However, these provisions do not apply to charges or invoices issued by non-common carriers solely for their own account.

The opinion also notes that these provisions apply to all charges and invoices over which the FMC has existing jurisdiction and that OSRA 2022 neither contracted nor expanded the FMC’s jurisdiction related to this issue.

For more information on the impact of OSRA 2022, or ST&R’s other FMC-related services, please contact Jason Kenner (at (212) 549-0137 or via email), Andy Margolis (at (305) 894-1021 or via email), or Ned Steiner (at (202) 730-4970 or via email).

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