On February 23, 2024, the Federal Maritime Commission (FMC) issued a Final Rule intended to add clarity to invoicing requirements outlined in the Ocean Shipping Reform Act of 2022 (OSRA 2022). In particular, the Final Rule provides minimum information for demurrage and detention (D&D) invoices and procedures for disputing charges. D&D invoices have created a host of issues for importers and shippers throughout the economy, especially as they relate to the lack of information provided on the invoices.Continue Reading What Do Importers and Shippers Need to Know about the FMC’s New Rule on D&D Invoices?
- Many of the rate hikes represent almost a 100% increase in shipping rates
- The special permission is not only to increase the rates and charges, but these increases are effective immediately as they also waive the FMC’s required 30-day notice period for increasing rates
- Absent significant military or diplomatic action, our expectation is that these circumstances will not disappear quickly
The Federal Maritime Commission (FMC) has granted special permission to ocean carriers to immediately increase the rates on containers that are being rerouted around the Cape of Good Hope in Africa or are retaining feeder vessels for pickup of cargo at high-risk ports in the Red Sea due to increased hostilities. Since mid-November 2023, Houthi rebels based in Yemen have attacked Red Sea shipping bound for Israel or linked to Israeli ports. Reported security incidents have ranged from outright attacks, approaches, and business interruptions to mere sightings.Continue Reading FMC Allows Rate Hikes for Carriers in Response to Red Sea Hostilities
Don’t Forget the Chassis in the Chase for the Cure.
A new level of frustration has arisen from the ocean shipper ranks during this “post-COVID” period. Shipments from Asia to the U.S. are experiencing extreme difficulties in getting their cargo delivered, mainly due to the acute shortage of chassis to effect delivery of their containers on the U.S. side. The painful example of this is the BNSF current experience with Lot W. Aside from the impact to the importer in not being able to access its cargo and experiencing serious damage to its business, it is also likely to face serious demurrage charges from the ocean carrier. This is on top of having just experienced a quadrupling (or more) of the base FAK per container rates, and the ocean carrier choices to leave agricultural commodities sitting at West Coast U.S. ports, favoring the shipment of empty containers opting to position equipment for the lucrative Asia to U.S. trade.Continue Reading The Dynamic of the Chassis Quandary Today in Ocean Shipping in the United States
On April 28, 2020, the Federal Maritime Commission (“Commission “or “FMC”) released the long-awaited interpretive rules in Docket No. 19-05 relating to how ocean common carriers may lawfully apply demurrage…
Continue Reading New FMC Interpretative Demurrage and Detention Rules: Will They Assist Ocean Transportation Intermediaries?
What might not be so obvious in this COVID-19 environment, which we have grown to associate with shortages, is that counterintuitively there are issues beginning to appear dealing with the opposite situation. The Journal of Commerce has reported that “[t]he container shipping industry is marshaling a response to signs of a building import backlog as some retailers and manufacturers fail to pick up containers because warehouses are full or closed due to not being deemed essential service providers responding to coronavirus disease 2019 (COVID-19).” This is a development with implications to all stakeholders in the supply chain and will have some impact on retailers/manufacturers, ocean carriers, ocean transportation intermediaries, and warehouses.Continue Reading COVID-19 Impacts on Demurrage and Detention
Most agencies of the United States government, including the Federal Maritime Commission (”the Commission”), have been closed since December 22, 2018. Since that date shippers, ocean common carriers, and non-vessel operating common carriers in their shipper role have not had access to SERVCON, the service contract electronic filing system of the Commission. So how is it intended for these supply chain players to adhere to Commission regulations related to initial or service contracts about to be renewed, or amendments to existing service contracts during this dysfunctional period which at this point hasn’t shown even a hint of an end game? Short answer: the same as always, but without the filing obligation nor risk of sanctions (penalties). The filing requirement is temporarily lifted. Therefore, service contract activity can continue as usual without concern of penalties. There are some caveats though.
Continue Reading U.S. Government Shutdown: The Impact on Federal Maritime Commission Service Contracts
The following is a short, to the point, summary of recent developments which impact transportation intermediaries, some of which can be implemented simply without fanfare, others which just bear careful monitoring. The Federal Maritime Commission (“FMC”) recently passed new regulations relating to Negotiated Rate Arrangements (“NRAs”), and NVOCC Service Arrangements (“NSAs”) which require some simple implementation, but then little else. The Federal Motor Carrier Safety Administration (“FMCSA”) has amended Hours of Service regulations which provide for strict usage of Electronic Logging Devices (“ELDs”), and a corresponding obligation for those intermediaries who select motor carriers for transport. Last but not least, we will briefly explore the question of where is the transport intermediary industry headed in the evolving e-commerce revolution?
Continue Reading Update on Current Issues Impacting Transportation Intermediaries
WHEN? The Federal Maritime Commission by Final Rule issued July 19, 2018 took final rules to simplify freight pricing requirements for Non-vessel Operating Common Carriers (“NVOCCs”) by establishing changes to Negotiated Rate Arrangements (NRAs) and NVOCC Service Arrangements (NSAs). These new Rules become effective August 22, 2018.
Continue Reading New FMC Regulations Effective August 22, 2018
WHEN? On June 6, 2018, the Federal Maritime Commission took steps to simplify freight pricing requirements for Non-vessel Operating Common Carriers (“NVOCCs”) by “approving” changes to Negotiated Rate Arrangements (NRAs) and NVOCC Service Arrangements (NSAs). While many NVOCCs are still utilizing the fast disappearing tariff publication methods of meeting the regulatory shipping requirements, it is our opinion that the contemplated changes to NRAs and NSAs will win over the NVOCC community to their almost exclusive usage. While the “Final Rules” were approved, it was clear from the FMC meeting, that the written provisions were still at a drafting stage. In discussions with senior FMC staff, it is our understanding that the so-called “Final Rules” will be going to the Federal Register later this week. By law they are required to be posted on the Federal Register for 30 days before becoming effective. Therefore, a good bet would be that these rules will be effective sometime in the first week of August, 2018.
Continue Reading New NVOCC Pricing Models on The Horizon