2022-10-20 DnD PRA Supporting Statement (clean) (1)

NARRATIVE SUPPORTING STATEMENT FOR
46 CFR PART 541 – DEMURRAGE AND DETENTION
SUBPART A – BILLING REQUIREMENTS AND PRACTICES
A.

Justification

1.
Explain the circumstances that make the collection of information necessary.
Identify any legal or administrative requirements that necessitate the collection. Attach a
copy of the appropriate section of each statute and regulation mandating or authorizing the
information collection.
Section 7(a)(1)(G) of the Ocean Shipping Reform Act of 2022 (OSRA 2022) (codified at
46 U.S.C. § 41104(a)(15)) requires common carriers, including vessel-operating common
carriers (VOCCs) and non-vessel-operating common carriers (NVOCCs), to include minimum
billing information on demurrage and detention invoices. Specifically, common carriers must
include: (A) date that container is made available; (B) the port of discharge; (C) the container
number or numbers; (D) for exported shipments, the earliest return date; (E) the allowed free
time in days; (F) the start date of free time; (G) the end date of free time; (H) the applicable
detention or demurrage rule on which the daily rate is based; (I) the applicable rate or rates per
the applicable rule; (J) the total amount due; (K) the email, telephone number, or other
appropriate contact information for questions or requests for mitigation of fees; (L) a statement
that the charges are consistent with any of Federal Maritime Commission (Commission) rules
with respect to detention and demurrage; and (M) a statement that the common carrier's
performance did not cause or contribute to the underlying invoiced charges. 46 U.S.C.
§ 41104(d)(2). In addition, OSRA 2022 authorized the Commission to require additional
minimum information by subsequent rulemaking. Id.
In this rulemaking, the Commission is extending the billing requirements to marine
terminal operators (MTOs) because these entities also issue demurrage and detention invoices.
The rule also requires billing parties (common carriers and MTOs) to include all the information
identified in 46 U.S.C. § 41104(d)(2) and additional information on demurrage and detention
invoices not currently required by statute. For example, the rule requires that invoices include:
(A) the bill of lading number; (B) the basis for why the invoiced party is the proper party of
interest and thus liable for the charge; (C) the invoice issuance date; (D) the invoice due date; (E)
the specific dates for which demurrage and/or detention were charged; (F) digital means (such as
a URL address, QR code, or digital watermark, that directs the billed party to a detailed
description of information or documentation that the billed party must provide to successfully
request fee mitigation, refund, or waiver; and (G) defined timeframes for the billed party to
request a fee mitigation, refund, or waiver, and for the billing party to resolve such requests.
Requiring billing parties to include the above information on demurrage and detention
invoices will promote transparency to billed parties so they can identify the relevant container,
the applicable charges, and the dates for which they are charged demurrage and detention, so that
they can verify the accuracy of the charges or assess the reasonableness of the charges. In
addition, the proposed rule requires billing parties to provide basic information to billed parties
regarding the steps necessary to request fee mitigation, refunds, or waivers.

2.
Indicate how, by whom, and for what purpose the information is to be used. Except
for a new collection, indicate the actual use the agency has made of the information
received from the current collection.
Billed parties, such as beneficial cargo owners (BCOs), other shippers, and motor carriers
can use this information to verify the accuracy of their demurrage and detention charges.
Correspondingly, billed parties will be able to assess the reasonableness of the charges. It is also
likely that the billed party will submit demurrage and detention invoices when they request fee
mitigation, refunds, or waivers. In addition, if the billed party files a charge complaint under 46
U.S.C. § 41310, they must submit the invoice at issue. We expect that after receiving a section
41310 charge complaint, the Commission will use the invoice during its investigation of the
contested charge.
3.
Describe whether, and to what extent, the collection of information involves the use
of automated, electronic, mechanical, or other technological collection techniques or other
forms of information technology, e.g., permitting electronic submission of responses.
The Commission anticipates that the billing parties will use automated, electronic,
mechanical, or other technological collection techniques to obtain a majority, if not all, of the
minimum billing information required in Part 541. The Commission received comments to its
Advanced Notice of Proposed Rulemaking and NPRM that indicated that most of the billing is
automated. In addition, although some billing parties issue paper invoices, it is understood that
many billing parties issue demurrage and detention invoices electronically.
4.

Describe efforts to identify duplication.

This collection would not duplicate any information already available to the agency or
other approved Collection of Information.
5.
If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.
The Commission treats NVOCCs as small businesses when conducting the impact on
small business entities. This rule requires that any NVOCC invoice with demurrage or detention
charges contain certain minimum information. However, in most, if not all, cases, the NVOCCs
are passing through charges billed to them by VOCCs or MTOs. Accordingly, the NVOCC
should have the minimum information required in the proposed regulations on the demurrage
and detention invoices they received. As a result, there should be minimum additional burden on
NVOCCs to provide the required information on their demurrage and detention invoices.
6.
Describe the consequence to Federal program or policy activities if the collection is
not conducted or is conducted less frequently, as well as any technical or legal obstacles to
reducing burden.
As discussed above, 46 U.S.C. § 41104(a)(15) and (d)(2) requires common carriers to
provide certain minimum information on demurrage and detention invoices. Current billing
practices and the lack of transparency in those practices have raised concerns about whether
current practices allow for a competitive and reliable American freight delivery system. The

changes to current detention and demurrage billing practices this rule requires are meant to
change the settled practices that do not ensure accuracy, clarity, and visibility of charges.
The rule requires common carriers and MTOs to include certain additional information
on such invoices. The requirement to provide such information on the invoices promotes
transparency. Commenters asserted that including such minimum information will reduce the
time and effort spent by billed parties to verify the charges. Accordingly, including such
information would permit billed parties to pay the charges or request fee mitigation, refunds, or
waivers in a timelier manner. The proposed rule would also extend the requirement to MTOs and
the Commission anticipates similar benefits from requiring MTOs to provide such information
on their demurrage and detention invoices.
7.
Explain any special circumstances that require the collection to be conducted in a
manner inconsistent with OMB guidelines. (a) requiring respondents to report information
to the agency more often than quarterly; (b) requiring respondents to prepare a written
response to a collection of information in fewer than 30 days after receipt of it; (c)
requiring respondents to submit more than an original and two copies of any document;
(d) requiring respondents to retain records, other than health, medical government
contract, grant-in-aid, or tax records, for more than three years; (e) in connection with a
statistical survey, that is not designed to product valid and reliable results that can be
generalized to the universe of study; (f) requiring the use of statistical data classification
that has not been reviewed and approved by OMB; (g) that includes a pledge of
confidentially that is not supported by authority established in statute or regulation, that is
not supported by disclosure and data security policies that are consistent with the pledge,
or which unnecessarily impedes sharing of data with other agencies for compatible
confidential use; (h) requiring respondents to submit proprietary trade secrets, or other
confidential information unless the agency can demonstrate that it has instituted
procedures to protect the information’s confidentiality to the extent permitted by law.
The proposed rule does not require the collection to be conducted in a manner
inconsistent with OMB guidelines.
8.
If applicable, provide a copy and identify the date and page number of publication
in the Federal Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting
comments on the information collection prior to submission to OMB. Summarize public
comments received in response to that notice and describe actions taken in response to the
comments. Specifically address comments received on cost and hour burden. Describe
efforts to consult with persons outside FMC to obtain their views on the availability of data,
frequency of collection, the clarity of instructions and recordkeeping, disclosure, or
reporting format (if any), and on the data elements to be recorded, disclosed, or report.
The 60-day Federal Register Notice was included in the Notice of Proposed Rulemaking
(NPRM) published October 14, 2022, at 87 Fed. Reg. 62341.
9.
Explain any decision to provide any payment or gift to respondents, other than
remuneration of contractors or grantees.
Not applicable – The Commission does not provide any payments or gifts to respondents.

10.
Describe any assurance of confidentiality provided to respondents and the basis for
the assurance in statute, regulation, or agency policy.
The rule requires VOCCs, NVOCCs, and MTOs to provide certain minimum information
when issuing demurrage or detention invoices. Billing parties may only issue demurrage or
detentions invoices to person who have with a contractual privity with the billing party for the
carriage of goods parties or space to store goods. The contract’s terms and applicable law
provides respondents assurances of confidentiality. In addition, if a party submits a demurrage
and detention invoice to the Commission, then the Commission will provide confidential
treatment for identified confidential information to the extent allowed by law.
11.
Provide additional justification for any questions of a sensitive nature, such as
sexual behavior and attitudes, religious beliefs, and other matters that are commonly
considered private. This justification should include the reasons why the Commission
considers the questions necessary, the specific uses to be made of the information, the
explanation to be given to persons from whom the information is requested, and any steps
to be taken to obtain their consent.
There are no questions of a sensitive nature.
12.
Provide estimates of the hour burden of the collection of information. The statement
should indicate the number of respondents, frequency of response, annual hour burden,
and an explanation of how the burden was estimated. Unless directed to do so, the
Commission should not conduct special surveys to obtain information on which to base
hour burden estimates. Consultation with a sample fewer than 10 potential respondents is
desirable.
The Commission anticipates the actual respondent universe will be the 354 VOCCs and
MTOs currently registered with the Commission. The Commission estimates the total hour
burden for issuing demurrage and detention invoices with the minimum billing information to be
113,500-227,000 (see below).
The Commission estimates an annualized cost to respondents for information collection
as $6,339,020-$12,678,040. This includes overhead and benefits. (See Attachment 1.)
Requirement
Provide amended
invoices and review
accuracy
TOTALS

Annual
Respondents
354

Annual
Instances
1,135,0002,270,000

Average
Hours Per
Response
0.1

Total Hours
113,500227,000
113,500227,000

The Commission offers the following descriptions of the information collection
requirements shown in the above table:

Provide amended invoices: It is estimated that between five and ten percent of all
containers moving in U.S.-foreign trade will receive a demurrage and/or detention bill. This
number translates to an estimated range of between 1,135,000 and 2,270,000 invoices issued
annually. An estimate of 6 minutes per response includes providing the invoice and ensuring the
accuracy of the newly required information.
It should be noted that the burden submitted to ROCIS with the NRPM contained an error
and was estimated as $126,788,500. The calculation of burden in the initial draft supporting
statement was $12,678,040 and it is unchanged for the final estimate.
13.
Provide an estimate for the total annual cost burden to respondents or record
keepers resulting from the collection of information. (Do not include the cost of any hour
burden already reflected on the burden worksheet).
* The cost estimate should be split into two components: (a) a total capital and start-up cost
component (annualized over its expected useful life) and (b) a total operation and
maintenance and purchase of services component. The estimates should take into account
costs associated with generating, maintaining, and disclosing or providing the information.
Include descriptions of methods used to estimate major cost factors including system and
technology acquisition, expected useful life of capital equipment, the discount rate(s), and
the time period over which costs will be incurred. Capital and start-up costs include,
among other items, preparations for collecting information such as purchasing computers
and software; monitoring, sampling, drilling and testing equipment; and record storage
facilities.
* If cost estimates are expected to vary widely, agencies should present ranges of cost
burdens and explain the reasons for the variance. The cost of purchasing or contracting out
information collections services should be a part of this cost burden estimate. In developing
cost burden estimates, agencies may consult with a sample of respondents (fewer than 10),
utilize the 60-day pre-OMB submission public comment process and use existing economic
or regulatory impact analysis associated with the rulemaking containing the information
collection, as appropriate.
* Generally, estimates should not include purchases of equipment or services, or portions
thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with
requirements not associated with the information collection, (3) for reasons other than to
provide information or keep records for the government, or (4) as part of customary and
usual business or private practices.
In addition to the cost burdens described in item 12, the Commission estimates that the
time burden for adding the required elements to the respondents’ current invoicing systems is 25
hours per respondent. This results in a one-time cost to respondents of $882,522 to update their
IT systems so that their invoices will provide the required minimum information. Assuming a 3
percent annual interest rate and a lifecycle of 5 years, the annual cost is $198,657.
14.

Provide estimates of annualized cost to the Federal government.
There is no cost to the Federal Government associated with this rulemaking.

15.
Explain the reasons for any program changes or adjustments reported in Items 13
(or 14) of OMB Form 83-I.
Not applicable – The Commission does not report any program changes or adjustments.
16.
For collections whose results will be published, outline the plans for tabulation and
publication.
Not applicable – The Commission does not plan to publish any information.
17.
If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate.
Not applicable – The Commission is not seeking approval to exclude the display of the
expiration date for OMB approval of this information collection.
18.
Explain each exception to the certification statement identified in Item 19 of OMB
Form 83-I.
Not applicable -- The Commission proposes no exception to the certification statement on
OMB Form 83-I.
B.

Collections of Information Employing Statistical Methods
This collection of information does not employ statistical methods.

Attachment 1
12.

Estimated Burden and Costs, Including Overhead, to Respondents

We estimate that respondents will spend a total of 113,500-227,000 hours to provide
invoices and to ensure accuracy. This estimated hourly burden is split 80 percent to billing and
posting clerks (90,800-181,600 hours) and 20 percent to managers (22,700 – 45,400 hours).
The salary for the Manager was calculated using SOC code 11-1021, and the salary for
the Billing and Posting Clerk was calculated using SOC code 43-3021. The salary data are from
the 2021 Occupational Employment and Wage Statistics published by the Bureau of Labor
Statistics. Overhead of 102.93% has been added to the basic salary. The overhead rates and the
adjusted annual salaries included below are rounded to the nearest cent.
Formula: hourly salary + overhead rate = adjusted hourly salary
Manager adjusted hourly salary: $55.41 (basic hourly rate) + $57.03 (overhead) = $112.44
Billing and Posting Clerk adjusted hourly salary: $20.55(basic hourly rate) + $21.15 (overhead)
= $41.70
Employee
Manager
Billing and Posting
Clerk
TOTALS
a The

Adjusted Hourly
Salary
$112.44b
$41.70c

Number of Hours

Totala

22,700-45,400
90,800-181,600

$2,552,468-5,104,935
$3,786,552-7,573,104

Commission rounded the total to the nearest dollar.
adjusted hourly salary used to calculate the total is $112.443513.
c The adjusted hourly salary used to calculate the total is $41.702115.
b The

Submitted into ROCIS:

$6,339,020-$12,678,040