Government late charges to truckers under carrier haulage agreements, but the WSC challenged that the plain text of the expressly prohibits that.

The appellate court agreed with the WSC’ s argument that there is a contradiction in allowing parties in a contract to bill each other in one instance but not in another instance.

While the FMC’ s rule aimed to“ confine the parties against who demurrage and detention charges may be levied to entities who are in a contractual relationship with the billing party, the commission, without adequate explanation, left out entities who are in such a contractual relationship while seemingly including others who are not,” the court said in its ruling.

“ Obviously we are disappointed by the court’ s ruling. How this will play out, I’ m not sure.”

The FMC’ s rulemaking attempted to protect parties that may not know the terms for when detention and demurrage could be billed. But the court determined that truckers in carrier haulage agreements with ocean carriers are aware of detention and demurrage provisions in those agreements, so they can be held responsible for those fees.

“ The trucker has precisely the kind of first-hand information from negotiating the contract that the commission views to be vital to allowing imposition of demurrage and detention fees,” the court said.

Even though the WSC did not challenge the FMC’ s determination that consignees could also be hit with detention and demurrage, the judges said the inclusion of consignees highlights the rule’ s seeming contradiction because they may not have a contractual relationship with an ocean carrier.

“ There may well be sound explanations for allowing billing of consignees even absent privity, but the commission’ s account of its decision to include consignees— which is found in the rule’ s preamble— does not attempt to provide one,” the court said.

The WSC said in a statement to the Journal of Commerce that it wants to work with the FMC on promulgating a rule“ incentivizing the on-time pickup and return of shipping containers to and from ports to prevent supply chain congestion.”

“ Consumers, shippers, truckers, port operators and ocean carriers all benefit from a D & D rule that ensures containers keep moving to where they’ re scheduled to be, without delays and backups,” the WSC said.

The FMC said in a statement to the Journal of Commerce the ruling only applied to one part of the agency’ s entire rulemaking which aimed to better police how detention and demurrage are charged. Thirty-day deadlines for issuing and contesting the late fees and detailed information on invoices about how detention and demurrage are calculated remain enforceable by the agency.

“ Failing to include any of the required information eliminates any obligation of the billed party to pay the charges,” the FMC’ s statement said.“ The court’ s ruling only addressed one section of the demurrage and detention rule, regarding who invoices can be sent to. The majority of the rule remains fully in effect.”

email: bill. mongelluzzo @ spglobal. com email: michael. angell @ spglobal. com

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