New Demurrage Invoicing Regulations in Ocean Shipping Reform Act – 2022

Posted on: September 1, 2022

The Ocean Shipping Reform Act – effective June 16, 2022.

The Ocean Shipping Reform Act – 2022 (OSRA-2022) went into effect on June 16, 2022 and the law (not a regulation) calls for an immediate change in the way Demurrage is invoiced to the customer. The FMC is in charge of regulating and enforcing this new requirement and they have issued a formal notice to the industry that the new law went into effect on June 16 and there is NO grace period.

Demurrage invoices that do not comply with OSRA-2022 do not need to be paid and can be challenged by the customer via the FMC.

OSRA-2022 includes the following rules and requires the following information on each Demurrage invoice or the invoice will not be in compliance with the law and the customer can challenge the invoice.

A. Date that container is made available. (Note: This is a new data element and is not the same as Discharge from Vessel).

B. The Port of Discharge.

C. The Container Number(s).

D. The earliest return date (for US Export Containers only).

E. The allowed free time in days.

F. The start date of Free Time. (Note: This needs to be based on Container Availability Date and not Discharge Vessel Date).

G. The end date of Free Time

H. The applicable Demurrage Rule in your tariff on which the daily rate is based.

I. The applicable rate or rates per the applicable rule.

J. The total amount due.

K. The e-mail, telephone number, or appropriate contact information for questions or requests for mitigation of fees.

L. A statement that the charges are consistent with any of the Federal Maritime Commission rules with respect to Demurrage and Detention.

M. A statement that the Common Carrier’s performance did not cause or contribute to the underlying invoice charges.

Safe Harbor: If a Non-Vessel Operation Common Carrier (NVOCC) passes through to the relevant shipper an invoice made by the ocean common carrier (VOCC) and the FMC Commission finds that the Non-Vessel Operating Common Carrier (NVOCC) is not otherwise responsible for the charge, then the Ocean Common Carrier (VOCC) shall be subject to refunds and penalties pursuant to the subsection (d)(1).

Elimination of Charge Obligation: Failure to include the information required under section (d) of this law on an invoice with any Demurrage or Detention charge shall eliminate any obligation of the charged party to pay the applicable charge.

Trade Tech is in the process of getting the following functionality in response to these new rules in place:

a). We have added a new event to our shipment records including AMS Security Filings for Container Availability. This is in addition to events for Container Pick Up which is the end date for Demurrage calculations.

b) We are asking the Ocean Carriers to please provide us with the Container Availability Date via EDI 315 for all shipments where our customers have used us to make an electronic booking or to transmit the Shipping Instructions (B/L Instructions).

c). We have made Demurrage and Detention data fields within our FMC Tariff environment so that they can be easily used for calculations and meet FMC compliance at the same time. This includes the capacity to have Customer and Location specific Demurrage and Detention Rates.

d) We are adding to our functions a new Container Availability Notice. This is in addition to an Arrival Notice since container availability may not become known until well after vessel arrival. This form will include Demurrage Charges and will meet the FMC requirements.

Please contact your local office for more details and to discuss what we can do to assist you.

logistics management | Trade Tech

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