FMC Invitations Shippers to Touch upon Equity of Ocean Provider Billing

Issued: October 7, 2020

AGENCY: Federal Maritime Fee

ACTION: Discover of Inquiry

SUMMARY: The Federal Maritime Fee (“FMC” or “Fee”) is issuing this Discover of Inquiry (“NOI”) to solicit public touch upon the apply of vessel- working widespread carriers (VOCCs or provider) defining “Service provider” of their payments of lading to use to individuals and entities with whom the VOCCs might not be in contractual privity. Usually, the Fee seeks public remark as to 1) how VOCCs apply the time period “Service provider” of their payments of lading; 2) whether or not the definition, as utilized, topics third events who will not be in contractual privity with the provider to joint or a number of legal responsibility; and three) whether or not carriers have enforced the definition of service provider towards third events that haven’t consented to be certain by, or in any other case settle for, the phrases and circumstances of the invoice of lading.

DATES:

Submit feedback on or earlier than November 6, 2020.

ADDRESSES:

Submit feedback to:

Rachel E. Dickon, Secretary

Federal Maritime Commissio

secretary@fmc.gov

(e-mail feedback [as] attachments ideally in MS Phrase or PDF)

 

800 North Capitol Avenue, N.W. Room 1046

Washington, D.C. 20573-0001

Telephone: 202-523-5725

 

FOR FURTHER INFORMATION CONTACT:

Benjamin Okay. Trogdon, Director, and

Cory Cinque, Trial Legal professional

Bureau of Enforcement

Federal Maritime Fee

800 North Capitol Avenue, N.W

Washington, D.C. 20573-0001

Telephone: 202-523-5783

E-mail: btrogdon@fmc.gov and ccinque@fmc.gov

 

SUPPLEMENTARY INFORMATION:

Submit Feedback:

Feedback could also be submitted by e-mail as an attachment (ideally in Microsoft Phrase or PDF) addressed to secretary@fmc.gov on or earlier than November 6, 2020. Embody within the topic line: “Response to FMC NOI – Service provider Clause.” The Fee will present confidential remedy for feedback acquired to the extent permitted by regulation and won’t submit feedback to the general public docket. Questions concerning submitting or remedy of confidential responses to this inquiry ought to be directed to the Fee’s Secretary, Rachel E. Dickon, on the phone quantity or e-mail offered above. This NOI can be made accessible by way of the Federal Register and on the Fee’s web-site at www.fmc.gov.

Background:

The Fee has acquired info from delivery trade contributors that VOCCs have outlined “service provider” of their respective payments of lading to incorporate individuals or entities who don’t have any useful curiosity within the cargo, however somewhat are offering service as third events on behalf of somebody particularly recognized on the invoice of lading. The issues expressed point out that VOCCs could also be implementing the phrases of the invoice of lading (together with, with out limitation, assortment of freight charges and fees, gear fees, detention and demurrage fees) collectively and severally towards entities that aren’t celebration to, and haven’t agreed to be certain by the invoice of lading. The Fee has been suggested by third-party logistics suppliers, harbor truckers, stevedores, customs brokers and freight forwarders, a lot of whom don’t have any connection to the cargo or the cargo, apart from offering service to entities that will personal or have a proprietary curiosity within the cargo lined by a VOCC invoice of lading, that VOCCs search fee from such third events for charges and fees pursuant to the phrases and circumstances of the invoice of lading. Allegations have additionally been acquired that VOCCs threaten to discontinue permitting such third events to offer service for future shipments except quantities due on present shipments are paid.

This situation was raised in Docket No. 19-05, Interpretive Rule on Demurrage and Detention Below the Delivery Act by a number of commenters, together with the New York New Jersey Freight Forwarders and Customs Brokers, the Nationwide Customs Brokers and Freight Forwarders Affiliation, the Agricultural Transportation Coalition, in addition to different trade contributors for the reason that issuance of the Closing Rule. As famous within the Closing Rule, “the Fee’s emphasis within the NPRM that ocean carriers invoice the proper celebration mirrored issues raised by truckers that they have been being required to pay fees that have been extra appropriately charged to others.” 85 FR. 29638, at 29662 (Might 18, 2020). A number of commenters reiterated these issues. AgTC contended that ‘‘carriers ought to impose detention and/or demurrage on the precise exporter or importer buyer with whom the provider has a contractual relationship.’’ The New York New Jersey Overseas Freight Forwarders & Brokers Affiliation asserted that VOCCs outline the time period ‘‘service provider’’ of their invoice of lading too broadly, leading to events being billed for demurrage and detention ‘‘no matter whether or not they’re really in command of the cargo when the costs have been incurred.’’ Id.

The Fee clarified that certainly one of its targets for the Interpretive Rule “was to emphasise the significance of ocean carriers and marine terminal operator payments aligning with contractual duties.” Id. In doing so, the Fee famous that it “doesn’t consider it’s acceptable on this interpretive rule to prescribe” particular billing practices, or to deal with the appliance of the service provider definition because it associated to such practices. Id. The Fee additional famous it will tackle such points within the context of specific info, contemplating all related arguments. Though the Fee included reference to sure billing practices and rules within the Closing Rule, it declined to prescribe particular billing practices or rules which might be deemed cheap underneath 46 U.S.C. 41102(c).

Common contract regulation rules present that one celebration can’t implement a contract towards one other who didn’t assent to be certain by its phrases and circumstances. This will embrace conditions the place one celebration makes an attempt to bind one other celebration with unilaterally outlined phrases. Accordingly, the Fee has decided to request public touch upon the style through which VOCCs are defining the time period “Service provider” and implementing that definition of their payments of lading. The aim of the inquiry is to find out whether or not such provider enforcement (i.e., in search of to gather freight and different fees) is unfairly or unjustly wielded towards third events who haven’t instantly contracted with the VOCC nor assented to be certain by the contract of carriage. The Fee encourages all events, together with VOCCs, shippers, ports, maritime terminal operators, ocean transportation intermediaries, truckers, stevedores or customs brokers to submit feedback or to determine info related to the style through which VOCCs have utilized their respective definitions of “Service provider.”

As a part of this NOI, the Fee can even be contacting sure VOCCs to offer details about the style through which they’ve outlined and utilized their definition of a “Service provider.”The Fee will contemplate related feedback submitted by any celebration. Together with feedback, commenters ought to present their title, title/place, contact info (e.g., phone quantity and/or e-mail tackle), title and tackle of the corporate or different entity and the kind of firm or entity (e.g., provider, exporter, importer, commerce affiliation, and so on.).

Responses to the NOI will assist the Fee verify extra exactly the practices of VOCCs, together with whether or not they might be imposing legal responsibility on entities who might not have assented to be certain to the phrases and circumstances of a VOCC’s invoice of lading, and in figuring out whether or not further analyses or motion by the Fee could also be crucial.

By the Fee.

Rachel Dickon

Secretary