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VIEWPOINT: Supply Chain Technology’s Role in Navigating Detention & Demurrage fees under OSRA 22

Pervinder Johar, CEO, Blume Global | July 28, 2022

Players in the supply chain are no stranger to detention and demurrage (D&D) fees, especially during the pandemic where excessive port congestion led to historic record levels of charges incurred. On June 16, President Joe Biden signed the Ocean Shipping Reform Act of 2022 (OSRA 22) into law — the first major revision of US maritime regulatory statutes since 1998. Under OSRA 22, carriers are subject to fines if they charge D&D for situations beyond a shipper’s control e.g., inability to move cargo as a result of congestion, unavailability of appointments or a shortage of chassis. Carriers are now required to provide valid certifications on all fees for containers.

Carriers, shippers and freight forwarders need to look to solutions from a supply chain technology partner if they want to be proactive in preventing and reducing D&D charges.

How can technology reduce detention and demurrage charges?

“Are the charges valid? What caused these to be incurred?” These are some initial thoughts that come to mind when faced with D&D charges.

In short, one doesn’t want to pay for it if one isn’t responsible. Our unique visibility solutions equipped with execution have helped clients reduce D&D charges up to 65%. Implementing them can enable carriers, shippers and freight forwarders to tap into their operations, ensure everything is streamlined and adjust as needed.
supply-chain

Currently, Blume Maps helps customers predict changes in the cutoff date for container pick up and changes in the earliest return date (ERD), which helps them avoid fees. Blume Maps has the intelligence to forecast and predict if the freight is going to hit the port before the ERD and provides alternative options given the estimated time of arrival (ETA). For example, if your current plan has the container returning to the terminal before the ERD, Blume Visibility via Blume Maps can help you reschedule your dray carrier to push the shipment back to fall within the proper ERD window. Or, in the event you cannot make a change in time, it would be able to notify you of an estimated D&D charge on your shipment.

Dray carriers on our platform use CarrierGo to identify at-risk shipments and prioritize their work to prevent and reduce D&D charges. The solution simplifies the process of dispatching transport work orders between customers and a network of motor carriers. It also automates workflow and ensures smooth communication through a reliable, easy-to-use, cloud-based platform.

Our shipper customers utilize CarrierGo Live, a free drayage directory service, to locate hidden dray trucking capacity and find drayage providers on the spot market. This alleviates supply chain congestion at ports and inland terminals. CarrierGo Live enables our carrier customers to book chassis while generating new business on Blume’s network and ensure unallocated capacity and last-minute cancellations don’t go to waste.

How can supply chain technology help navigate the new D&D rules?

D&D invoices dated after June 16 must include 13 elements required by OSRA, or the invoice does not have to be paid. While most of the components are simple to provide, the last two elements raise some concern:

  • 12. Statement that charges are consistent with any FMC detention and demurrage rules.
  • 13. Statement that common carrier’s performance did not cause or contribute to the underlying invoiced charges.

Though they might seem innocuous, they are significant. They are legally binding statements supplementing invoices, and if they are challenged and ultimately disproven, there can be legal implications.

Invoicing done through Blume Global’s platform will automatically include all the necessary elements required by OSRA 22, to ensure you are compliant with the new rules.

Furthermore, the data collected by Blume Visibility will keep tabs on all players in each respective shipment process. It will be able to pinpoint exactly where a D&D charge was incurred, whether it is a dray carrier who couldn’t make an appointment or a freight forwarder who failed to properly coordinate a container pick up. This will help the invoicing process and will ensure that the charges are borne by the right customer.

With OSRA 22 in full effect and new D&D rules enforced, the risk of falling victim to unwarranted charges can prove costly and disruptive. Choosing the right supply chain technology provider with visibility solutions that are combined with execution, like Blume Global, will empower you to control D&D charges and remain compliant throughout your operations and beyond.

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