March 2024

FMC Publishes Final Rule on Detention and Demurrage Billing Practices  (From NCBFAA)

The Federal Maritime Commission on Feb. 23 issued a final rule which establishes new requirements for how common carriers and marine terminal operators (MTOs) must bill for demurrage and detention charges, providing clarity on who can be billed, within what timeframe, and the process for disputing bills.

“This is a major win for shippers and NVOCCs alike,” said NCBFAA NVOCC Subcommittee Chair Rich Roche.

The FMC said a key provision of this rule determines that demurrage or detention invoices can only be issued to either: (1) the person for whose account the billing party provide ocean transportation or storage of cargo and who contracted with the billing party for the ocean transportation or storage of cargo; or (2) the “consignee,” defined as “the ultimate recipient of the cargo; the person to whom final delivery of the cargo is to be made”. Demurrage and detention bills cannot be issued to multiple parties simultaneously.

The rule also requires vessel-operating-common carriers (VOCCs) and MTOs to issue detention and demurrage invoices within 30 calendar days from when charges were last incurred. Non-vessel-operating common carriers must issue demurrage and detention invoices within 30 calendar days from the issuance date of the invoice they received…

…Billed parties have at least 30 calendar days to make fee mitigation, refund, or waiver requests. If a timely filed request is made, the billing party must attempt to resolve the matter within 30 calendar days, unless both parties agree to a longer timeframe…

…The FMC said the rule helps billed parties understand the demurrage or detention invoices by requiring certain “identifiable information” be included by the billing party on the invoice. Failure to include required information on these invoices eliminates any obligation of the billed party to pay the applicable charge. “Of course, if an invoice does comply, a charged party does have an obligation to pay charges billed,” the agency added.

Most of the rule takes effect on May 26. The “Contents of Invoice” section 541.6 involves information collection and must be approved by the Office of Management and Budget. The Commission said it will announce the effective date of section 541.6 once approved.

Ed. Note: This is a sea change from carrier & MTO previous practices!  They LONG abused these charges with impunity, and the FMC obviously agreed! Going forward, if you are assessed detention, demurrage, or per diem, please send us a copy of the invoice so we can confirm the invoice conforms to requirements.

Pressure to increase tariffs on goods from China (From Sandler, Travis, and Rosenberg)

U.S. tariffs on many imports from China are already high and there is increasing pressure to raise them still further. ST&R can help you determine how much such a change would cost your business and how best to mitigate that impact.

The Biden administration appears to have no intention of eliminating Section 301 tariffs on imports from China and has continually delayed a review that could offer limited relief. Former President Donald Trump is threatening to increase tariffs on Chinese goods to 60 percent or more if he is elected this November. In Congress, a bipartisan report issued in December recommended moving China to a new column in the Harmonized Tariff Schedule that would result in substantially higher tariffs on imports of Chinese products. In each case the underlying motivation is to give the U.S. leverage to hold China to its trade commitments, prevent it from engaging in coercive or other unfair trade practices, and decrease reliance on Chinese products in sectors important for national and economic security.

Ed. Note:  We urge you to try to source in countries other than China, not only for the possible increase in tariff rates, especially including the increasing number of AD/CVD cases, but to have a more secure and reliable supply chain.

New FDA Modernization of Cosmetics Regulation Act (MoCRA) Requirements (From Registrar Corp)

Congress recently passed the Modernization of Cosmetics Regulation Act (MoCRA).  This new US law requires most cosmetic manufacturers that export cosmetics to the US to register with FDA. Further, for each cosmetic product marketed in the US, the responsible person (which may be a US Company) must submit a cosmetic product listing to FDA. MoCRA has additional regulations for adverse event reporting, fragrances and allergens, as well as GMPs that will be required for companies selling cosmetics into the US in the coming years.

As specialists in FDA regulations, Registrar Corp has created a FREE tool called the “MoCRA Wizard” to help Cosmetic Importers and Exporters know which (if any) of the new MoCRA Requirements applies to them.  For any questions on this, please contact Coley Anderson