S3.E4 - Congress wants the FMC to hurry up w/ the Detention and Demurrage Rulemaking // a mini refresher on what the FMC last proposed on the D&D rulemaking

Topic of the Week (2/2/24):

Congress wants the FMC to hurry up with the D&D rulemaking (they sent a letter...) and we do a quick refresher on the proposed D&D rulemaking language from Oct 2022.

The Maritime Professorᵀᴹ presents By Land and By Sea - an attorney breaking down the week in supply chain

with Lauren Beagen (Founder of The Maritime Professorᵀᴹ and Squall Strategies)

Let's dive in...

1 - The Federal Maritime Commission is still working through three rulemakings. No new movements.

2 - The FMC will host an informal hearing on the Red Sea and Gulf of Aden on February 7 (in person and virtual).

Hearing Schedule:
https://www.fmc.gov/fmc-releases-schedule-for-hearing-on-threats-to-shipping/

3 - The Ocean Shipping Reform Act of 2022 (OSRA 22) co-sponsors, Representative Dusty Johnson (R-SD) and Representative John Garamendi (D-CA) wrote a letter to the FMC urging the FMC to finalize the rule on detention and demurrage billing requirements. 

https://dustyjohnson.house.gov/sites/evo-subsites/dustyjohnson.house.gov/files/evo-media-document/letter-to-fmc-on-dd-rulemaking-1.26.2024.pdf

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#ByLandAndBySea

Transcript

Lauren Beagen: 0:56

Did you see? Congress sent a letter to the FMC telling them to hurry up with detention and demerge rulemaking? We're gonna talk about it.

Lauren Beagen: 1:05

Welcome to By Land And By Sea, an attorney, breaking down the weekend supply chain presented by the Maritime Professor, me. I'm Lauren Beagen, founder of the Maritime Professor and Squall Strategies, and I'm your favorite maritime attorney. Join me every week as we walk through both ocean transport and surface transport topics in the wild world of supply chain. As always, the guidance here is general and for educational purposes only. It should not be construed with legal advice and there is no attorney-client privilege created by this video or this podcast. If you need an attorney, contact an attorney. But before we get into the discussion of the day, let's go through my top three stories of the week. Alright, story number one we've been having it on here for a while. We're gonna continue to keep it on right. We're watching the FMC closely for the release of any movement on these three open rule makings. We haven't seen much movement in a while. It's 1pm on a Friday afternoon. Hasn't happened so far.

Lauren Beagen: 2:01

Remember, the FMC is working through three different rule makings and one request for information. The three rule makings they were directed by Congress under the Ocean Shipping Reform Act of 2022 to undertake. So those rule makings are defining unreasonable or freezal to dealer negotiate with respect to vessel space accommodations provided by an ocean common carrier. Number two billing practices of detention to merge. We're going to talk a little bit about that today. And number three defining unfair, unjustly discriminatory methods. So those are the three rule makings. Congress is asking the FMC to hurry up on the billing practices of detention to merge. That's what we're going to talk about shortly here. But the other two defining unreasonable or freezal to dealer negotiate with respect to vessel space accommodations. Remember that one reopened for a supplemental notice of proposed rulemaking. Those comments closed over the summer, that was July 2023.

Lauren Beagen: 2:51

And then this defining unfair, unjustly discriminatory methods. The commission has said that they actually incorporated some of that into that first rulemaking that unreasonable or freezal to dealer negotiate but they haven't done a dedicated, standalone rulemaking for that third element that Congress actually asked them to do. Right, they asked them to undertake these three very kind of what they thought was distinct rule makings and the FMC has kind of commingled that third one into the first one, as as it made sense to do. But they still have some elements that they want to hit that will likely come in a third rulemaking this done. Defining unfair, unjustly discriminatory methods we haven't seen any language. That doesn't mean they're not working on it. I can almost assure you that they are. I'm sure they are, and each time Congress tells them to do something, they're going to take it seriously, right? So those three rulemaking are what we're waiting on. We really haven't had a lot of movement on any three of them in a while, at least, certainly from the FMC itself. And then we have the request for information, the RFI that's from the Maritime Transportation Data Initiative. We're still waiting to see any additional movement from that or additional RFI rounds. So that's what we're waiting on. That's kind of our recap of what we look at every week.

Lauren Beagen: 4:01

But story number two is also FMC related. It's a very FMC day. Story number two is a reminder of the hearings that are coming up next week. It's next week already. So these are the shipping conditions. The hearing is the shipping conditions in the Red Sea.

Lauren Beagen: 4:15

The FMC has announced that they're going to be having a hearing, likely based on the high level of interest in what's going on in the Red Sea. They're going to be expanding that to a second day is what they said, because they've been so much interest in probably that hearing that they called for this is an informal hearing. It's not part of a larger thing necessarily. It's an informal hearing. They said that they want to seek the balance of viewpoints of those presenting. They also said, if needed, they're going to be inviting, inviting panelists. So the deadline to sign up, if you were interested in being a panelist, was the 31st of two days ago. They are going to be kind of filling the slots of speakers.

Lauren Beagen: 4:55

Like I said, they were intending initially to have it just on Wednesday, february 7th. They said, if needed, they would continue that on to the eighth. That's probably because they got a lot of interest in this hearing. They want to maintain the balance of the voices so even though people may not have asked to be on the panel, the FMC might be going out and soliciting their involvement. I think that sounds good, right? They want to be fair. They want to make sure that the voices on the panel are kind of all different areas of the supply chains. They get an accurate, complete view in this, like I said, informal hearing on the shipping conditions in the Red Sea. So again, what they're going to be examining, what they said is how conditions in the Red Sea and the Gulf of Aden are impacting commercial shipping and the global supply chains.

Lauren Beagen: 5:40

The hearing is supposed to allow stakeholders to communicate with the commission of how operations have been disrupted by attacks and commercial shipping steps taken in response to these events and then the resulting effects. I think this is going to be pretty interesting. They're going to be webcasting this out so you certainly can be there in person. It's going to be at the surface transportation board in DC, but they are going to be live streaming this for those who can't participate in person. All the panelists were required to be there in person, but you don't have to be to watch it. I believe they're going to be putting this on their YouTube page, but I'll certainly add that information as I get the link. But the FMC, don't forget, they're going to be having this hearing in less than a week. It's going to be five days from now. It's next Wednesday, february 7th, and potentially Thursday, february 8th.

Lauren Beagen: 6:27

All right, story number three so this is the story about Congress asking the FMC to hurry up. So on January 26th, so last Friday, congressman Dusty Johnson and Congressman John Garamendi wrote a letter to the FMC urging the FMC to finalize the rule on detention to merge billing requirements. They said, as required by ASRA, the Oceans and Superinformat of 2022, which was actually co-sponsored, right by these two congressmen. As we know, asra 2022 became law June 16th 2022. So, look, I've seen a few people mentioning this letter online. I don't think it's a huge deal, right? Sure, I'm playing it up for today, but I don't think it's a huge, huge deal.

Lauren Beagen: 7:10

Yes, the FMC is very overdue on the final rule of the D&D rulemaking. But in terms of these congressmen sending this letter, they actually sent one last year too. They sent a letter last January 2023. So it almost seems to suggest that this is like a routine letter that they send to the FMC encouraging the finalization of the rulemaking, not to minimize the fact that the congressmen are telling them hurry up, guys. But I don't think that this is. You know, of course that's what the FMC is trying to do. I don't think that this is the you must hurry up letter.

Lauren Beagen: 7:44

The letter in January 2023, it was actually a little premature, I would say, as the Oceans and Superinformat of 22 law had only required the D&D rulemaking to be finalized one year from the date of enactment, so that was June 16th 2023. They sent their letter January 23, the first letter, and now they're sending another letter a year from that. But the first letter was kind of preemptive to the deadline of the D&D rulemaking. Stated another way, the FMC was supposed to have finished this June 16th 2023, one year post the enactment of Osrow, which was June 16th 2022. They didn't do that congress is saying look, hurry up, please. The letter itself is actually probably mostly what you'd expect, right, and it does stress the urgency, but it's not overly condemning of the extended timeline, right. So one part that I did find interesting, though, is the attention to the marine terminal operators and ports. It was a very short letter, it was just about one page, but they had like three, maybe four paragraphs, but they had like paragraph number two dedicated to a discussion, a quick discussion, of marine terminal operators and ports. So what this said from the congressman?

Lauren Beagen: 8:57

In this letter, mr Stephen A Edwards, chief executive officer of the Virginia Port Authority, testified on the urgency of finalizing this critical rule before the House Committee transportation and infrastructures hearing on January 17th 2024. When asked what Congress can do to improve ocean shipping, mr Edwards implored members of the committee to encourage the FMC to finalize the Dermurge and Detention Rule. He also testified that marine terminal operators and other industry participants from top to bottom are eager for a finalized rule so they can comply with the intent of the law. Of course, right? Yes, of course. Of course. The ports want it done, the carriers want it done, the shippers want it done. Everybody wants this rule finalized, but it was. I just note that it was interesting that this came from a port and maybe because the port is a US interest. It's US based. This was the Virginia Port Authority.

Lauren Beagen: 9:51

But I find it interesting because Congressman Ockincloss of Massachusetts sent a late filed comment for the detention Dermurge Dock and we talked about this previously that was sent just this fall, where he said in that letter that he didn't support versions of the Ocean Shipping Reform Act of 2022 that included MTOs its entities to be included in any rulemaking on Dermurge or Detention Billing Practices, and he said very plainly that they shouldn't be included. He said Marine Terminal Operator should choose whether to charge Dermurge as well. So he suggested that the incentive principle is being misapplied by the FMC. Didn't say that outright, but he suggested that, which was part of what the MTO should choose whether to charge Dermurge. He's saying, look, the MTOs shouldn't be beholden to this incentive rule. They should be able to choose whether to charge Dermurge and when. So all that to say I'm just interested, right, like this is starting to build a kind of interesting dynamic. I'm interested to see if what makes it into the final language, right, will the MTOs be included in the detention to barge billing rulemaking? I guess we're gonna find out, and hopefully soon.

Lauren Beagen: 11:03

Look, I would suspect that this congressional letter from Dusty Johnson and John Garamendi might increase the urgency of the final rules release, right, because they sent one in January 23,. Now there's anyone January 24. I mean, it just kind of brings it fresh to the congressman's mind. Who enacted this law, who told the FMC to do this? And I can imagine that the FMC is like I know we're trying, we're trying, but maybe internally they're like we gotta get this out. So all that had me thinking that maybe it's time we did a little refresh of what the last D&D billing practice is, what the last round was, the notice of proposal rulemaking.

Lauren Beagen: 11:47

We've covered this before. I think we covered right when it came out October 2022. Did you hear that the last movement from the commission on this was October 2022. We are now in January 24, which is a little deceptive because we just right turned the page of the year. It was just 23. So we're actually just maybe 14 months past the last movement from the agency side. We've talked about that.

Lauren Beagen: 12:15

They were addressing the congressman's concerns, the late filed comment. They met. They had an ex parte communication that was put into the docket. Look, there's been stuff happening. But any sort of formal release of documents on the agency side here, kind of in the furtherance of this rulemaking was really last done October 2022. So, and again, we had 180 or so comments filed at the time. So that's a lot. So they had a lot to go through.

Lauren Beagen: 12:46

And then they probably were getting close this fall and then had that late filed comment from the congressman, aqua Claw, saying look, take the MTOs and ports out of it. That probably threw a little wrench into the whole process and so they had to revise or revisit or just kind of reassess whether they were making the right decisions for the next step, based on and I would argue, hopefully Congress. Well, that one congressman's letter and whoever else he had supporting in it I think it was a congressman from Texas who also supported him Babin so weighing and kind of putting that into the mix of things that they're considering. But then also all the comments right, 180 comments from the actual stakeholders in the industry. So I think that they needed some time to kind of digest the newly submitted right, very late filed from the fall letter from the congressman, but then also what they already kind of knew they had maybe thought about. So all of this to say let's get into the meat and potatoes of the day, I thought it would be appropriate to kind of refresh what the proposal was at the last stage for the notice of proposed rulemaking.

Lauren Beagen: 13:58

So a little procedural history. Remember the commission came out in I believe it was April of 2022, saying they hadn't advanced notice of proposed rulemaking on detention and demerge. They were asking questions in the industry of where they should go with this rulemaking. That was before Congress told them to do that. They said we need to tackle this detention and demerge. That was, I believe, spring of 2022. I believe it was April of 2022. So a while ago, almost two years ago, the FMC kind of started this on their own. Osra passed June of 2022. They said Congress said look, fmc, you definitely need to hit this detention and demerge rulemaking. Fmc said thanks for your input, we already are. It shifted a little bit the focus on the next round that we saw. So the FMC incorporated the Osra requirements into the next round, which was the notice of proposed rulemaking, which is where they start to propose some text of what they want in the proposal or what they're suggesting in the proposal. And that's the last stage that we had the notice of proposed rulemaking for detention to merge billing requirements.

Lauren Beagen: 15:04

Today let's just refresh it pretty quickly. I mean it's pretty, there's a lot going on in the proposal. I encourage everybody to go back and check it. Just. I mean, just stay fresh on it, right? So the proposed rule was saying that it would do four things. One adopt minimum information that common carriers must include in a demerge and detention invoice. That was listed. Number two add to this list additional information that must be included in and with or with a detention to merge invoice. And so I say that was listed in Osra. So one was adopt minimum information that must be included. That was part of the Osra 13 requirements. Two they're saying they're gonna be adding a few things. Three they're gonna further define prohibitive practices by clarifying which parties may be appropriately built for D&D charges. And four establish billing practices that billing parties must follow when invoicing or D&D charges. So the rule went through a whole thing of summarizing the comments that were brought in on the advanced notice of proposal. We'll make that first go around.

Lauren Beagen: 16:11

But what was actually in the proposal? That's all I really wanna focus on. I don't wanna get too down in the weeds on the procedural stuff of it, I just wanna kinda hit the content. So they go through a lot of definitions. The commission defines the terms to emerge into tension broadly to include any charge assessed by common carriers and marine terminal operators related to the use of marine terminal space or shipping containers. So just because they include D&D in their definition as including MTOs, I think that's okay, right? What Congressman Aachencloss and Congressman Babin were basically saying was we just don't want the requirements to be also put on the MTOs. Okay, let me just keep going on the content here, right?

Lauren Beagen: 16:52

So the FMC said in their proposal the goal is to encompass all charges having the purpose or effect of demerge or detention, regardless of the labels given to those charges. Remember, we saw that in the advanced notice of proposal rule making two years ago. They're basically trying to say look, if you're calling it per diem or something else, doesn't matter if it's falling within the scope of what is detention or is demerge, I don't care what you call it, that's what it is. So they're trying to kinda streamline that by saying, look, demerge or detention needs to start being called that in the appropriate instance. So they said, under this definition, a charge assessed by a common carrier for the use of containers outside of a marine terminal would fall within the scope of this rule, regardless of whether the charge was called detention, appropriately, or per diem. Similarly, a charge assessed because a container is taking up terminal space would fall within the scope of this rule, even if the billing party called the charge something other than to merge. So they kind of just simply said what to merge is taking up space on the yard or terminal and what detention is the use of the container outside of a marine terminal. So they continue to say the proposed rules specifically limits those definitions to shipping containers and excludes charges related to other equipment such as chassis, because, depending on the context, per diem can refer to containers, chassis or both. They also say the commission supports defining to merge or detention charges based on what asset is the source of the charge land or container, as opposed to the location of a container inside or outside of a terminal.

Lauren Beagen: 18:27

The commission discouraged use of terms such as storage and per diem as synonyms for demurged detention because those terms add additional complexity. So what we saw throughout the proposed rulemaking, the NPRM, was the commission really tried to simplify where they could. There was really an intention and they kept saying in the language that they were trying to simplify things. So again they go on to also define build party. So the build party was meaning the person receiving the demurged or detention invoice and who was responsible for the payment of any encouraged demurged or detention charge. In the commission's view, this proposed definition would best capture the intended scope of this term and eliminate any potential ambiguity to its coverage. They go on to explain build party a little bit more, where they said the proposed rule would define the billing party as meaning well, that was build party. Then they go on to define billing party and they kind of explain these a little bit further down in the proposed rule. So the billing party, meaning the VOCC, the NVCC or the MTO who issues a demurged or detention invoice, that's the billing party. I mean, these are kind of basic but they make sense. So they wanted to define build party billing party.

Lauren Beagen: 19:41

Billing dispute would mean any disagreement with respect to the validity of the charges or the method of their invoicing raised by the build party or their agent to the billing party. This proposed definition and more generally, this proposed rule does not indicate a preference or requirement for the format in which a dispute may be raised. Instead, the commission proposes a broad definition that incorporates all types of disputes raised by a billing party, a build party, upon receiving and demurged or detention invoice, that's a billing dispute. So I will add look, the FMC really encourages dispute mechanisms away. For the build party dispute, the charge and not just a junk mechanism is something that I think that the FMC was kind of trying to get at with the explanations here. So, going into a little bit more of the content, going past some of the definition, they go into properly issued invoices. So under the proposed rule, a properly issued invoice is issued only to the person that has contracted with the billing party for the carriage of good or space to store cargo and is therefore the person responsible for the payment of any encouraged D&D charge. They clarify that that's often the shipper of records. So the proposed rule would prohibit billing parties from issuing D&D invoices to persons other than the person for whose account the billing party provided ocean transportation or storage. So they're saying look, we just want this to be streamlined.

Lauren Beagen: 21:05

They said in the A&PRM, the advanced notice, the first round, many commenters described a current widespread practice where the billing party sends the invoice to multiple parties, most of whom are not the recipient of the service, giving rise to the invoice charge. So they said that basically, with that current system, parties who did not negotiate contract terms with the billing party are nonetheless bound by them, and that creates additional confusion and hardship. So they said so said in an opposite way. The FMC wants to see only the direct contractual relationship and they said mostly this was because they know the terms of the contract. If anything does go wrong and shouldn't need to be disputed, they want that direct contractual relationship. That's what they're proposing. They also say in the current system, invoicing multiple parties can result in duplicative payments, which further complicates resolving invoice disputes, because now you have multiple payments going in and so you're creating multiple new disputes of trying to get payment back, waivers, all of those things.

Lauren Beagen: 22:06

So the commission said that they believe prohibiting billing parties from issuing demerged attention invoices to persons with whom they do not have a genuine commercial relationship will similarly benefit the supply chain. When D&D invoice disputes do arise, the bill parties in a better position than third parties such as truckers and customs brokers to analyze the accuracy of the charge right. So they said practically the proposed rule would prohibit billing parties from invoicing motor carriers or customs brokers. Although a motor carrier could pay on behalf of a billed party, the motor carrier would not be liable for those charges and could not be penalized for non-payment of charges. They're trying to streamline this. They also said during this proposed rulemaking stage that they wanted feedback on that. They really they wanted a lot of comments to talk about that and we went through some of those comments in subsequent episodes. But again, this is kind of a refresher for what's in the proposal. As of October 2022.

Lauren Beagen: 23:09

So you're saying, only the person who contracted with Common Carrier for the carriage of goods or storage of goods may be issued an invoice. There are a variety of shipping arrangements that allocate risk, obligations and cost between the ship and the consignee named on the bill of lading. Considering these arrangements, the commission, like I said, was specifically seeking comment on whether it would be appropriate to also include the consignee named on the bill of lading as another person who may receive a demergered detention invoice. They said, in sum, the proposed rule should simplify the current system and ensure that the person with the most knowledge about the shipment and who is in the best position understand and dispute the charge receives a D&D invoice. So again, they really wanted this to be simplified. I'm interested to see if that sticks. There's so many operational considerations here at play. But I'm interested to see if that sticks, based on the comments, based on kind of the feedback of the stakeholders. Like I said, the FMC seems to be moving in the spirit of simplicity.

Lauren Beagen: 24:06

So minimum billing information this is kind of like the root of this whole rulemaking. Certainly they were filling in around it, but this is the detention to merge billing invoicing requirements. So the proposed rule requires the 13 items required for an invoice from ASRA. I remember those were the date the container is made available, the port of discharge, the container number for export achievements, the earliest return date, allowed free time and days, start date of free time and date of free time. This is all under ASRA. These are the 13 requirements the applicable detention to merge rule in which the daily rate is based, the applicable rate or rates per the applicable rule, the total amount do and the email, telephone number or other appropriate contact information or request for mitigation of fees for questions or request for mitigation of fees.

Lauren Beagen: 24:52

And then they also slid in these two statements a statement that the charges are consistent with any of FMC's rules with respect to detention to merge and a statement that the common carriers performance did not cause or contribute to the underlying invoice charges. That last one I've always kind of taken a little bit issue with because it says a statement that the common carriers performance did not cause or contribute to the underlying invoice charges. The common carrier isn't always the one issuing the invoice and so if it's not the common carrier issuing the invoice, why should they say the common carrier who's not issuing did not cause or contribute? It just feels a little. I don't know. I've never loved that one. It's a little bit unclear, it's a little bit. It can be a little bit confusing there and potentially a little bit incorrect. But anyway, so we move on.

Lauren Beagen: 25:43

So the proposed rule, as the FMC said, would also require billing parties to include minimum information in addition to those 13 requirements. So the FMC would like to include specific identifying timing, rate and dispute resolution information and their requesting comments on whether it should require billing parties to include all the proposed information in demerge and detention invoices. If the commenter opposes any of the proposed requirements, they should identify the information in the obstacles or burden. So these were what they were asking for comments on. If the commenter supports the proposed required information, they should explain how the specific information will assist them in verifying the accuracy of the charge or ascertaining how the charge was calculated. And I think that last piece is important because they really were trying to get to accuracy of the invoice, accuracy of the charges and checking work ascertaining how the charge was calculated. So identifying information the proposed rule clarifies that billing parties must only include ports of discharge for import shipments, because providing the port of discharge on a demergered detention invoice would be less useful for exports. So they're kind of clarifying some of the congressional ASRA language, right.

Lauren Beagen: 26:54

They said the proposed rule would also require billing parties to include the bill of lading number and the basis for why the bill party was invoiced and thus liable for the charge. That last one is a little bit interesting, right, the basis for why the bill party was invoiced. So that kind of goes back to that direct contractual relationship. Why did they send it to the bill party? Timing information this was kind of an interesting piece and I'm going to be interested to see where they end up on this whenever the final rule is released. But, like I said, hopefully that letter from Congress will scoot things along.

Lauren Beagen: 27:31

But so timing information in the content of the D&D rulemaking, the proposed rule from October 22. So it says the invoice must contain sufficient information to enable the bill party to identify the relevant time for which the charges apply and the applicable due date for the invoice charges, including the billing date, the billing due date, the allowed free time in days, the start date of free time, the end date of free time for imports, the container availability date, for exports, the earliest return date and the specific date for which it emerges attention or charge. So all of that was kind of a combo of Osrum, the 13 invoice requirements and then the proposed rule modifying a few right, so modifying and saying for imports the container availability dates and for exports the earliest return date, which actually Congress did identify at the earliest return date under exports. So the commission continued OSRA 22 requires the invoices include the date the containers made available for export achievements, the earliest return date, and it kind of goes through a few of the different things that OSRA had required. But it said the proposed rule clarifies that the billing parties must only provide container availability date for import shipments. Like we're saying, they clarified that piece.

Lauren Beagen: 28:45

The proposed rule would also require billing parties to specify the dates for which demerge and detention charges accrued, the billing date and the billing due date. And this is where it's kind of all building up. This is where it was really interesting, right? So they were talking about the 30 days and the 60 days, but they also talked about clock stopping events. So instead of requiring billing parties to identify specific clock stopping events on D&D invoices, the proposed rule would require the billing party to identify the specific dates on which they charge D&D. So there was some talk about clock stopping events and they didn't actually go into specifics of what those were and I think a lot of people want some clarity on that. But I just don't know if it's gonna come in the D&D what a clock stopping event is and the justification for that. But what this is saying? Because they're trying to get the guardrails in place for billing practices. They're saying look, just give us the dates. If you have a clock stopping event, that's fine, but if it goes Monday to Wednesday Thursday was a clock stopping event and then Friday to Tuesday, then just show us those dates on the invoice, the only the dates that you are actually billing for. Break it up, chunk it up so that we can see.

Lauren Beagen: 29:54

The FMC is also proposing in the rule to incorporate the intent of ASRA to shift the burden to billing parties to justify the demurgered detention, while allowing the billing parties to correct invoices when the intervening events are not initially known to them. So they're saying look, the burden is on the billing parties to justify D&D charges, but they can also correct invoices. And so the proposed rule would require the billing party to include the invoice, billing date and payment due date. And the proposed requirement to include the billing date and the payment due date will enable the bill party and the commission to confirm that the billing parties are adhering to the proposed billing practices outlined in the proposed language. And I thought that this proposed language was interesting because they don't talk about this piece as much in the text, or they certainly don't kind of highlight it. So this is, in the proposed language, the actual text of what they proposed the rule be changed to. So it said section 541.7,.

Lauren Beagen: 30:55

If you scroll down to the very, very end of the proposed text you can see where they actually put out what the rule is supposed to look like. So it's an issuance of D&D invoices. So part A a billing party must issue a D&D invoice within 30 days from the date on which the charge was last incurred. So this is what is new in kind of the FMC's rulemaking from even the first stage. They're proposing a 30 day from when the charge was last incurred to when the invoice has to arrive If the billing party does not issue D&D invoices within the required timeframe. So if the invoice doesn't go out within that 30 days, then the bill party is not required to pay the charge. Be careful, though, one. This is still a proposal, this isn't a rule yet, but that's kind of interesting. They're saying look, they're gonna absolve the bill party of having to pay it, because if it's after 30 days it's too long, it took too long.

Lauren Beagen: 31:54

But subpart B this is what I want you to focus on. Subpart B, if the billing party invoices the incorrect party. So if the invoice goes to the incorrect party, the correct bill party must receive an invoice within 30 days from the date the incorrect party disputes the charges with the billing party. So the carrier issues the invoice. Let's say in this example, they send it to. Well, okay, we'll use the terms of the FMC.

Lauren Beagen: 32:24

The billing party issues the invoice, right, they send it off. It goes to a billed party. Turns out they send it to the wrong person. The billed party says they file a dispute they say I'm not paying this, this isn't my stuff. So the billing party says ooh, all right, yep, that went to the wrong person. From the date that that incorrect billed party received that invoice and from the date that they dispute, the billing party has 30 days to correct it. So basically, from the moment that they find out it went to the wrong person, they have 30 days to send it to the correct person.

Lauren Beagen: 32:58

So an invoice to the correct billed party must be issued within 60 days after the charges were last incurred. So they send it to the wrong person. The wrong person said nope, you send it to the wrong person, I'm not paying this. 30 days you get from that moment to send it to the right person. But look, if it's 60 days from when the charge actually happened. So let's say they send it to the wrong person again and then you get the 30 days. If it's 60 days from the date that the charge last occurred to the wrong person, then they send it to the wrong person.

Lauren Beagen: 33:36

The build party the correct build party needs to receive it within 60 days. If the build party does not receive the D&D invoice within the required time frame, then it's not required to pay the charge. Let me say that again Billing party sends invoice, they send it to the wrong person. Wrong person says nope, wrong person. From that date the billing party has 30 days to send it to the correct person. But if they mess it up again or for some reason, more than 60 days has happened from the last the last charge To when the correct person gets it.

Lauren Beagen: 34:15

The FMC, under this proposed language again proposed language is saying Then it's not required to pay the charge. The build party, if they receive it, if the correct build party gets the invoice More than 60 days because it wasn't their fault that it kept going to the wrong person, if it's more than 60 days under proposed language, the FMC is saying that it's not required to pay the charge. That's interesting. I don't remember that being really highlighted the first round, so again, today's all a refresher.

Lauren Beagen: 34:45

So what else is in the, what else was in this proposed language that the Congressman are now saying FMC, hurry up and send us the final language rate information. They're saying that they need to clarify With sufficient details so that the bill, the billing party should provide sufficient details so that the build party is able to locate the specific rate that should apply and confirm that the invoice includes that specific rate. They're also saying under the proposed rule, the invoice must contain sufficient information to enable the build party to readily identify A contact to whom they may direct questions or concerns or their dispute. Right, so they're saying the proposed rule would require the invoice to include an email, a telephone number or whatever contact information for questions or disputes, a Web address of a publicly accessible portion of the billing parties website that provides a detailed description of information or documentation that the build party must provide to successfully request mitigation or dispute. So the kind of saying put out there who to contact, put out there what information Needs to be provided. So that's all up front. And define time frames that comply with the billing practices on this part. So they want some clarity over this butte section. And that's what they're putting in this proposal.

Lauren Beagen: 36:06

Billing practices, again, the proposed 30-day time frame to issue the D&D invoice. And then this is the piece that's important once the correctly issued invoice goes to the correct build person, build party, then the build party has 30 days to Basically stake a dispute. Right, they have 30 days to say that they want to dispute the charges. So it's interesting, right, this is it's. I like this 30-day thing. I think that we're having some sort of a time frame on it because otherwise it gets too aging. So they're saying 30 days from when the last charge happened. The billing party needs to send the invoice. 30 days from when that invoice is received to the correct build party. That build party has to either submit their dispute or pay it. So, like I said, we have that 30 days. We kind of went at length of the, the actual text. So go check out section 541.7 of the proposed text as well, because that's where they talk about the Incorrect versus correct party and those timelines.

Lauren Beagen: 37:11

So today was just a refresher.

Lauren Beagen: 37:13

Right, all of this is still proposed language. This was just general discussion, not legal advice. This is simply refreshing your memory of some of the proposals we saw in that last notice of proposed rulemaking, of the detention Dormage rulemaking, and the reason why we brought all this up was simply because Congressman Dusty Johnson and congressman John Garamendi sent a letter to the FMC telling them to hurry up. So it it just kind of. It just Got in my head that it's been a while since we last looked at this and so I thought you might appreciate a look back. I know that I did, looking back at all the the language here. Go take a look yourself. This is general information, but if you are interested in the detention to merge rulemaking, I very, very much encourage you to go check it out yourself. Go refresh the language in your own mind so that you know what the language was at the last round. Maybe even go check out some of the comments. There were a lot of comments, but there was some really great information coming through in those comments as well.

Lauren Beagen: 38:13

So, as always, the guidance here is general for educational purposes. It should not be construed by legal advice directly related to your matter. If you need an attorney, contact attorney. But if you do have specific legal questions, feel free to reach out to me at my legal company, school strategies. Otherwise, for the non legal questions, the e-learning and general industry information and insights, come find me at the maritime professor. If you like these videos, let me know, comment, like and share. If you want to listen to these episodes on demand or if you missed any previous episodes, check out the podcast . If you prefer to see the video, they live on my YouTube page , presented by the maritime professor. And while you're at it, check out the website. And maritime professor, calm. So until next week. This is Lauren Beagen, the Maritime Professor and you just listen to . See you next time.