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NVOCCs Caught in the Middle of U.S. Ocean Shipping Reform Act

Home News NVOCCs Caught in the Middle of U.S. Ocean Shipping Reform Act

NVOCCs Caught in the Middle of U.S. Ocean Shipping Reform Act

Industry feels FMC needs to pump the brakes to allow time to catch-up

The Ocean Shipping Reform Act of 2022 has left the industry in a difficult position regarding how to comply with the new requirements for invoicing demurrage and detention (D&D) charges.

At issue is the container availability date, which must now be included on all invoices as the critical piece of information that determines the fair assessment of D&D charges.

Ocean carriers and/or terminals have been unwilling or unable to provide this critical piece of information to non-vessel-operating common carriers (NVOCCs). There is no interface currently between the parties that communicates cargo availability information. As a result, they are having difficulty providing this information on their customers’ invoices.

The law stipulates that failure to include the information on an invoice with any D&D charge shall eliminate any obligation of the charged party to pay that applicable fee. Carriers could be forced to pay refunds and penalties if they are unable to demonstrate to the FMC the reasonableness of their D&D charges.

If this technology issue concerning communication and data structure for capturing and conveying the container availability date is not resolved, NVOCCs and customs brokers, who frequently advance funds for their customers to ensure the smooth movement of freight, may face a disastrous cash flow situation. As middlemen, they could be dispensing funds for customers who may later assert they do not have to pay the invoice because the D&D charges were incorrectly invoiced.

Source: Maritime Logistics Professional

View Farrow’s Customs Brokerage page. 

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