The source for trade compliance news

Upcoming House Bill Will Address Lack of Rail Storage Fee Oversight

Rep. John Garamendi, D-Calif., is drafting legislation that could lead to new oversight over certain rail storage charges assessed by ocean common carriers against shippers on through bills of lading. The bill, which hasn't been completed, could require the Federal Maritime Commission and the Surface Transportation Board to “get together” and decide who should regulate those charges, a Garamendi staffer told us.

Start A Trial

The bill is expected to be unveiled “later this fall,” the staffer said. Other lawmakers have “voiced interest” in sponsoring the bill, the staffer said, but Garamendi’s office is hoping to complete a “final version” of the legislation before securing a Republican co-sponsor.

More than 70 trade groups in May urged the leaders of the House Transportation and Infrastructure Committee to give the FMC jurisdiction over the fees, which shippers say are an unfair form of demurrage (see 2305030079). They said after ocean carriers contract with railroads to deliver goods to a U.S. inland point and those containers are delayed at the railyard -- through no fault of the shipper -- rail storage charges can accrue, and those fees need to be paid directly by shippers or their agents in order for their goods to be released.

The Garamendi staffer noted that there currently is no government body that regulates those rail fees. The lawmaker’s upcoming bill “would elect a regulator for these charges so that every rail charge is regulated by that agency,” the staffer said. In their letter to the House Transportation Committee, the trade groups suggested those charges be billed through the contracting carrier and be subject to demurrage and detention invoicing requirements that were included as part of the Ocean Shipping Reform Act of 2022.

The National Customs Brokers & Forwarders Association of America this week urged Garamendi and Rep. Dusty Johnson, R-S.D., to address the rail storage fee issue in their Ocean Shipping Reform Implementation Act, a follow-up bill to OSRA (see 2303290079). The staffer said they are still working to get the Ocean Shipping Reform Implementation Act -- which will not address the issue of rail fees -- ready for a vote on the House floor. The bill passed the House Transportation Committee 58-1 in May (see 2305230030).

NCBFAA, which will be lobbying for OSRA 2.0 as part of its fly-in next week, said its members support provisions in the implementation act that revise the definition of a controlled carrier and restrict the use of Chinese logistics platforms and software. They also like that the legislation establishes new advisory committees to the Federal Maritime Commission, and that it directs the FMC to begin rulemaking "about price indexes for containerized ocean freight for U.S. shippers published by a shipping exchange registered with the FMC."