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Bentzel Expects Clarity Surrounding Rail Storage Fees, Says D&D Final Rule Coming Soon

Federal Maritime Commissioner Carl Bentzel expects the government to eventually scrutinize certain rail storage fees imposed by ocean carriers on through bills of lading, he said during an industry conference this week. He also said the FMC is “very close” to finalizing its rule on detention and demurrage billing requirements and wants to better address issues involving service contract disputes between carriers and shippers.

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Bentzel, speaking during the National Customs Brokers & Forwarders Association of America's annual Government Affairs Conference Sept. 11, said he believes the FMC already has “jurisdiction over” the rail charges, but “there's just some issues on how you enforce it.” The commissioner added that the FMC has a “number of cases” currently open involving which party should be liable for the rail fees, and he believes “ultimately the ocean carriers” should be “responsible." But "it's a challenging issue, legally."

Bentzel expects lawmakers to “offer a proposal to make that more clear in the future.” Rep. John Garamendi, D-Calif., is drafting legislation that could lead to new oversight over the rail storage fees (see 2309060067).

Bentzel’s comments came after FMC Commissioner Max Vekich in April signaled he’s open to a further expansion of FMC authority over certain rail storage fees (see 2304280057) and after more than 70 trade groups urged the House Transportation and Infrastructure Committee to give the FMC jurisdiction over the fees (see 2305030079).

Bentzel also said the FMC is nearing completion of a final rule that would refine prohibited practices for demurrage and detention billing practices. The agency released a proposed version of the rule last year (see 2210070079), and Bentzel said the final version “will make changes.”

Bentzel declined to say what those changes would include, but reiterated the commission’s position, outlined in the proposed rule, that customs brokers should not have to pay certain demurrage and detention charges if they have been assigned as a "notify party." He said it's not "proper" a customs broker who "doesn't have a contract with" someone would have to pay fees in that scenario.

But he did acknowledge the situation becomes more “complex” when a non-vessel operating common carrier or freight forwarder “may be operating as a legitimate agent authorized to pay as part of their contract with their shipper.”

“So the question is: How do you define whether or not they're operating merely as a notify party or as an agent?” Bentzel said. “That’s something that we're wrestling with.”

Bentzel was also asked about shippers being unable to file charge complaints against marine terminal operators. He said the FMC is discussing the issue as part of its ongoing audit programs (see 2107210010 and 2303230060).

He also said he’d like to hold hearings to discuss issues surrounding service contracts. He said the FMC is seeing “a lot of cases” involving contract disputes even though they are “required to be considered” by a federal court.

Bentzel said the FMC has received 394 charge complaints since the Ocean Shipping Reform Act of 2022 was enacted. In addition, 162 cases have been assigned for investigation, 18 cases are under investigation, and 101 cases have been resolved through negotiations.

He also said the agency went from one administrative law judge to three, and the FMC is struggling to keep up with its caseload. The FMC has tracked more than $5 billion in detention and demurrage charges over the last fiscal year, Bentzel said, some of those "improperly levied.”