In a carrier haulage arrangement, also referred to as “store door” delivery or a “door move” or “door-to-door” transportation, the ocean carrier is responsible for arranging transport of a container from the terminal to another location, such as a consignee warehouse. In other words, the ocean carrier provides drayage trucking. In contrast, in a “merchant haulage” arrangement, also known as CY or port-to-port transportation, the shipper makes the trucking arrangements. The National Customs Brokers and Forwarders Association of America also advocates that the Commission “expand” the rule to reflect the railroad concept of constructive delivery of empty containers.
The UIIA “is a multimodal negotiated interchange agreement that serves as the standard interchange agreement for most intermodal equipment interchanges except chassis.” Generally, it governs relationships between signatory ocean carriers and truckers. Some commenters pointed out that the UIIA has provisions related to empty container return, billing, and billing disputes, and expressed concern that the rule could potentially conflict with this. Others noted problems with the UIIA or the extent to which other parties adhere to it. P4-16 at 4-5 (“But the incentive placed upon ocean common carriers and marine terminal operators to address port congestion is weakened if they can levy demurrage, detention, and per diem charges against parties who have no influence over the operations and conditions that prevent shippers, consignees, and drayage providers from promptly picking up cargo and returning equipment.”). The Commission therefore does not agree with some commenters’ arguments that it is always a reasonable practice to charge detention and demurrage after free time regardless of cargo availability or the ability to return equipment.
Letter from Rebecca F. Dye, Commissioner, to Michael A. Khouri, Chairman, Daniel B. Maffei, Commissioner, Louis E. Sola, Commissioner, Federal Maritime Commission (Aug. 27, 2019) . As to billing and invoice timeframes, the Commission believes that having time frames and abiding by them would be a positive development. It is beyond the scope of this guidance, though, for the Commission to decide what those timeframes should be.
B. Notice of Proposed Rulemaking and Comments
A few commenters assert without citation that free time contemplates that there are “pockets within that time where units will be unavailable for various reasons.” Ocean Network Express at 1; OCEMA at 4. The Commission would make clear that the reasonableness of free time turns on the needs of a shipper or its agent. Investigation of Free Time Practices—Port of San Diego, 9 F.M.C. 525, 539 .
OCEMA at 6 (“OCEMA has long supported the notion of clarity and accessibility with regard to detention and demurrage practices.”). 292.E.g., Transworld Logistics Shipping Servs., Inc. at 3 (“It must be mentioned here that the arrival notice which is a courtesy information cannot be confused or construed to replace a cargo availability notice.”). Section does not cover chassis providers who do not otherwise fall within the definition of a regulated entity under the Shipping Act. UIIA § B.2; financial models for equity research see also Casey, supra note 175 (“Notably, to comply with antitrust law, the UIIA cannot include or dictate economic and commercial terms that are specific to each equipment provider. Such terms are handled through individual addenda to the UIIA.”). PMSA at 3; see also WCMTOA at 5 (“The NPRM seeks to mandate the same practices nationwide, without regard to geography, terminal configuration (including operating ports vs. landlord ports), cargo volumes, and other local conditions.”).
What constitutes appropriate notice in one situation might not in another. Ocean carrier and marine terminal operator customers have varied needs, and the Commission is wary of asking regulated entities to develop tools that their customers are unwilling to use. Consequently, while the Commission may consider the factors listed in the NPRM in the analysis, it is not requiring any specific form of notice.
Related to Termination for Breach by AGTC
Some commenters would welcome that approach. But others have approached performance objectives with caution. In the event of any proceedings by or against either Party in bankruptcy, insolvency or for appointment of any receiver or trustee or any general assignment for the benefit of creditors, the other Party may terminate this Agreement. If the Customer increases the capability or the capacity of the Facility to exceed 4.999 MW, this Agreement shall immediately terminate. The Company shall not be liable to the Customer for damages resulting from a termination pursuant to this paragraph.
- Consequently, Commission precedent does not bar the Commission from applying the incentive principle to government inspections—it supports its application.
- Proceeding Duration and Location sub-docket codes and ACTION lines are also disallowed in that court.
- As noted by the petitioners in Docket No.
- WCMTOA at 9 (“If any final rule is adopted, it should make clear that it is reasonable for a terminal operator to charge demurrage if a container becomes unavailable for any reason after free time has expired.”); NAWE at 14 n.5.
- In the investigation’s second phase, the FFO met in-person and telephonically with representatives from a cross section of the industry, including over twenty-five ports and marine terminal operators.
IMC Companies at 2 ; S. Counties Express at 4 (“Terminals do not have appointments to receive an empty container, steamship line holds the motor carrier responsible until unit has a secured appointment and terminates the container. UIIA violation, no agreement in momentum day trading place.”). 2 (“If each case depends on an analysis of the facts of each case, as has historically been the case under Section 10 cases, it is unnecessary, and in fact counter-productive, to have a national standard such as in the NPRM.”); Nat’l Fed. of Indep.
Economic Sanctions & Foreign Assets Control
Ocean carrier and marine terminal operator commenters also contend that the rule would have a number of deleterious consequences. They argue that the rule is impracticable, that it ignores the costly burden it would impose on ocean carriers and marine terminal operators and others, that it limits contract flexibility and risk allocation. Additionally, these commenters contend that the rule could lead to an “explosion of time-consuming and expensive litigation,” increased container dwell time; and chassis shortages.
An increase in valid claims is not a negative result, and guidance is just as likely to reduce disputes because it allows parties to better assess the merits of a dispute before resorting to litigation. At present, there is little to no guidance on demurrage and detention and section in the containerization context. Applicability and scope. This rule applies to practices and regulations relating to demurrage and detention for containerized cargo.
The Commission fails to see how issuing an interpretive rule while declining calls for more prescriptive regulation, represents “extreme government intrusion.” It is unclear based on the comments whether there is anything the Commission could do regarding demurrage and detention that ocean carriers and marine terminal operations would not object to as overly intrusive regulation. That one purpose of the Shipping Act is to minimize government intervention does not mean that the Commission may abandon its duty to prevent unreasonable practices under section 41102. The Commission is making two minor, non-substantive changes to this paragraph of the rule. The first sentence of the paragraph stated that the Commission may consider the existence and accessibility of demurrage and detention policies. The final rule makes explicit that the Commission’s analysis is not limited to those two factors and that it may also consider the content and clarity of any policies.
The Commission stopped short, however, of specifying any particular form of notice. Suffice it to say, the assumption in Free Time and Demurrage Charges at New York that a shipper is able promptly to obtain equipment” might, in the case of a trucker and chassis, in some circumstances, no longer be valid. Accordingly, the Commission may, in an appropriate case, consider chassis availability in the analysis. In doing so the Commission would be especially careful to analyze how the chassis supply model at issue relates to the primary incentive purpose of demurrage and detention. Focusing port and marine terminal operations on notice of actual cargo availability would achieve the goals of demurrage and detention practices and improve the performance of the international commercial supply chain. The Federal Maritime Commission is clarifying its interpretation of the Shipping Act prohibition against failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property with respect to demurrage and detention.
II. NPRM and Summary of Comments
Additionally, insofar as ocean carriers are not fulfilling contractual obligations, shippers may have additional remedies. The rationale was that the more a regulated entity’s definitions of demurrage and detention differ from how it had used the terms and how the terms were used in the industry, the more important it was for the regulated entity to ensure that the definitions were clear. Further, considering how the terms were used elsewhere would encourage consistent demurrage and detention terminology, which was in line with the Fact Finding Officer’s finding that standardized demurrage and detention language would benefit the freight delivery system. In contrast, other commenters assert that shippers and truckers should not have to prove that they do not owe demurrage and detention, rather “he entity billing the fees should prove they are owed, as it is with any other business on Earth.” Another commenter points out it would be helpful if truckers have geo-fencing data available to demonstrate attempts to retrieve cargo and log records of attempts to make appointments. That said, the Commission is not requiring specific types of notice. The Commission’s guidance is intended to apply to a wide variety of terminal conditions.
That said, commenters’ APA-related arguments are unpersuasive. The primary distinction under the APA between legislative rules on one hand and interpretive rules and statements of policy on the other is that the former require notice and comment while the latter do not. While not required to engage in notice-and-comment rulemaking, the Commission nonetheless provided notice and requested comment on the proposed rule in this case, and ocean carriers, marine terminal operators, importers, exporters, intermediaries, and truckers also had the opportunity to weigh in on possible Commission action during the Fact Finding No. 28 investigation. Despite these criticisms, the Commission is not deleting this portion of the rule.
Further, several ocean carriers noted that their policies give them the discretion to waive demurrage under certain circumstances. But if application of demurrage in those circumstances would be unreasonable, a shipper, intermediary, or trucker should not have to rely on an ocean carrier or marine terminal operator’s discretion for a remedy. In other words, while the calculated bets Commission prefers commercial solutions to demurrage and detention problems, the Fact Finding record showed that commercial solutions are only adequate from the perspective of ocean carriers and marine terminal operators. In sum, none of these features of government inspections distinguish them from other circumstances that prevent shippers from retrieving cargo.