WSC's Comments on FMC's Proposed Detention and Demurrage Billing Requirements (FMC-2022-0066)

In the Ocean Shipping Reform Act of 2022 (OSRA 22) Congress directed the Commission to initiate a rulemaking that, “shall only seek to further clarify reasonable rules and practices related to . . . the final rule published on May 18, 2020, entitled ‘Interpretive Rule on Demurrage and Detention Under the Shipping Act’.” Instead of following that instruction, the Commission proposes to abandon the Interpretive Rule’s fact-specific analysis entirely and replaces it with absolute prohibitions on charging detention or demurrage to broad classes of entities.

WSC’s comments show how the Commission’s proposed rule: (i) ignores express Congressional directives and prior Commission precedent, (ii) is based on a fundamental misunderstanding about the contractual rights and responsibilities of various parties along the supply chain, and (iii), if adopted, abandons the Incentive Principle and will disincentivize many parties in the supply chain from timely collecting goods from marine terminals and returning
empty equipment for use by other customers.

Download the full comments here