The provision was incorporated after shippers told the agency they preferred not to receive invoices from marine terminals because they have no contractual relationship with them — even though other shippers wanted MTOs to be required to bill them directly to avoid additional fees from the carriers when they pass through such charges.
Drayage truckers may have been pivotal to getting the provision included, based on comments they submitted to the earlier proposal. “Motor carrier commenters expressed concern that billing parties frequently invoiced motor carriers, who have no contractual relationship with the billing parties,” the FMC stated.
Even though that’s the case, the Association of Bi-State Motor Carriers asserted that billing parties sometimes threaten to prevent drivers from picking up or dropping off containers due to disputes with one of the trucking company’s customers — which can mean the trucking company must cover the disputed charges so that it can continue to serve its other customers.
By incorporating this provision, FMC stated, drayage operators “would no longer be responsible to pay such charges or risk business relationships with their other customers if one customer disputes those charges.”
Added costs for carriers and terminals?
The stricter billing requirements may also come with a price tag, according to the FMC. Imposing a 30-day deadline to issue an invoice from when demurrage and detention charges stop accruing could result in a loss of revenue to the billing party, the agency stated.
In addition, new minimum billing information requirements “may require the billing party to collect additional information and change its billing information technology system to include all the required information on invoices.”
The FMC pointed out that VOCCs and MTOs — not NVOCCs, which tend to be smaller companies — would see most of any additional costs associated with the rulemaking, because VOCCs and MTOs commonly assess demurrage and detention charges. “In most cases, NVOCCs pass through detention and demurrage charges billed to them on invoices generated by VOCCs or MTOs,” FMC stated.
“Accordingly, NVOCCs should receive the minimum billing information required by the proposed rule from either the VOCC or MTO issuing the invoice. For these reasons, the chairman of the Federal Maritime Commission certifies that if this rule is promulgated, it would not have a significant economic impact on a substantial number of small entities.”