Although the Ocean Shipping Reform Act recently took full effect on November 1st, many logistics providers still struggle to comply with the new regulations laid out by the Federal Maritime Commission (FMC). These logistics providers could face steep fines, potentially driving up rates for already inflation-weary ocean freight shippers.
And who can blame them? The newly empowered FMC is asking shippers to provide information that is often difficult to locate, hidden in dense data piles and outdated tech stacks. Without easy access to vital shipping information, shippers cannot comply with the strict demands of recent OSRA 2022 legislation. To help shippers navigate the murky waters of the Ocean Shipping Reform Act, we’ve dug into the OSRA regulations on demurrage and detention and how logistics providers can stay fee-free in a complex logistics environment.
What is OSRA 2022?
The Ocean Shipping Reform Act of 2022, or OSRA, aims to reinvigorate an American container shipping industry dominated by large, foreign-owned shipping organizations. According to FreightWaves, “10 shipping lines control nearly 85% of the global market whereas 25 years ago, the top 20 companies only controlled half of the total market.” Seeing a challenging landscape for American shippers, the Biden Administration set out to create a more equitable logistics landscape at American ports.
“During the pandemic, ocean carriers increased their prices by as much as 1,000%,” President Biden said during his State of the Union Address, according to reporting from Logistics Management, “And, too often, these ocean carriers are refusing to take American exports back to Asia, leaving with empty containers instead. That’s costing farmers and ranchers—and our economy—a lot of money.”
After passing through both chambers of Congress, the bipartisan Ocean Shipping Reform Act was signed into law by President Biden on June 16th, 2022.
Though the OSRA has garnered considerable attention, the bill’s primary objective is to empower the relatively unknown Federal Maritime Commission, which had seen strict limits placed on its oversight capabilities during previous administrations. Under OSRA 2022, the Federal Maritime Commission (FMC) can employ a broader range of oversight tactics to “Ensure a competitive and reliable international ocean transportation supply system that supports the US economy and protects the public from unfair and deceptive practices,” as Sea Trade Maritime News reports. The FMC’s renewed efforts to rehabilitate ocean trade have manifested as changes to the regulations around demurrage and detention.
OSRA and Demurrage and Detention
In its pursuit of a more equitable global shipping landscape, OSRA 2022 institutes strict standards for carriers attempting to collect demurrage and detention charges at American ports. According to Global Trade Magazine, “[...] there was a major spike in D&D charges in 2021, the global average increase was 39% for standard containers whereas the charges for 20 distribution centers doubled in 2021.”
Although major ocean freight carriers blame port congestion and increased costs on pandemic-related shortages of people, equipment, and fuel, many critics of these companies blame the spike in fees on price-gouging during a time of increased vulnerability for American shippers. In hopes of balancing the scales in favor of smaller shippers, the FMC, under the Ocean Shipping Reform Act, has instituted 13 data fields that carriers must submit when invoicing VOCCs (Vessel Operating Common Carriers) for demurrage and detention.
OSRA 2022 Data Fields
1. Date Container is Made Available
Using this metric, the FMC can ensure that containers are moving through ports at a reasonable rate per the Ocean Shipping Reform Act.
2. Port of Discharge
Also known as Port of Unloading, this metric allows the FMC to monitor Demurrage and Detention practices at American ports closely.
3. Container Number or Numbers
To challenge unjust demurrage and detention charges, the FMC uses container numbers to closely monitor individual containers’ transit.
4. Earliest Return Date for Exports
This metric refers to the earliest date an export can be delivered to a container line and helps the FMC track container transit through ports under the OSRA.
5. Allowed Free Days
Before shippers get charged demurrage and detention, they receive an allotted amount of free days. Tracking this metric helps the FMC ensure that carriers give shippers adequate leeway before charging demurrage and detention.
6. Free Time End Date
With this metric, under the OSRA, the FMC can ensure that shippers aren’t fined for undue demurrage and detention before the end of the container’s free time.
7. D&D Rule on Which the Fine is Based
As demurrage and detention rates have increased over recent years, shippers have questioned which rule they’re being fined over. With this FMC requirement, shipper’s no longer have to search to find which rule they’re violating.
8. Applicable Rate or Rates per Rule
Primarily a transparency measure, this data field helps shippers make sense of previously opaque demurrage and detention charges.
9. Total Amount due for Demurrage and Detention
Though this required data might appear superfluous, pre-OSRA demurrage and detention charges often included hidden costs and fees.
10. Relevant Contact Information for Questions about Demurrage and Detention Charges
Before the OSRA, shippers had difficulty asking questions about demurrage and detention charges. With the new regulations from the FMC, shippers can quickly contact carriers to better understand complex fees.
11. Statement of Consistency with Federal Maritime Commission D&D Rules
This field ensures the FMC that carriers are fully aware of their obligations for demurrage and detention under the new OSRA guidelines.
12. Statement Saying the Common Carrier’s Performance did not Contribute to Demurrage and Detention Charges
With this statement, the carrier assures the FMC that their performance was not responsible for demurrage and detention charges incurred by the shipper.
13. Clock-Stopping Events
This data field gives shippers a deeper insight into the transit of their containers. It includes the unavailability of containers, pickup or return locations, appointments, chassis restrictions, and force majeure events.
OpenTrack Provides Shippers with Over Half of the Newly Required OSRA Data Fields
Facing steep fines from a newly empowered FMC, logistics companies struggling to comply with strict Ocean Shipping Reform Act regulations are desperate for solutions.
OpenTrack, a real-time container tracking solution, provides shippers with an intuitive, fully-integrated Automated Programming Interface. With improved container visibility from OpenTrack’s API, logistics providers can instantly access over half of the data fields and metrics demanded by the FMC through the Ocean Shipping Reform Act, including:
- Free Time End Date
- Total Amount Due for Demurrage and Detention
- Allowed Free Days
- Container Number or Numbers
- Port of Discharge
- Relevant Contact Information
- Date Container is Made Available
OpenTrack takes the hassle and worry out of compliance with the Ocean Shipping Reform Act and allows logistics professionals to focus on the work that matters. Book a demo with OpenTrack today, and see what worry-free OSRA compliance can do for your business.