The final rule of OSRA 2022 (Ocean Shipping Reform Act) regarding detention and demurrage was released on May 28, 2024. This resulted in a significant shift in how the shipping industry manages these charges. By addressing long-standing challenges that have influenced BCOs (Beneficial Cargo Owners), importers, NVOCCs (Non-Vessel Operating Common Carriers), ocean freight forwarders, and drayage providers, the rule brings clarity, fairness, and transparency to invoicing processes. Given the widespread backlash caused by the latest changes, SeaRates decided to share a complete look at the OSRA 2022, its role, and its impact on logistics.
The essence of the OSRA 22 final rule in 2024
Mainly, this rule is intended to stimulate containerized exports and protect the interests of U.S. exporters through additional control and regulation of containerized traffic by shipping lines that offer their service in U.S. ports.
Also, the document provides for the control and independent assessment of bills for demurrage and demurrage of container equipment, billed by the lines to shippers from the United States.
Before OSRA, disagreements in the shipping sector arose due to the absence of standardized billing procedures. This resulted in late invoices and a lack of clarity for BCOs and other parties involved. To deal with these concerns, the OSRA 22 final rule was released in 2024 for:
- Creating consistent billing procedures to determine the appropriate recipients of invoices and when they should be sent.
- Reducing unjust billing to ensure that charges are fair and transparent.
- Improving data visibility to facilitate better validation and dispute resolution.
In such a way, the government expects to reduce inflation in the country as well as relieve container terminals.
Key components of the OSRA 22 final rule 2024
Invoicing requirements
Invoices must be issued within 30 days after charges stop accruing. They also must include detailed information such as container availability, free days, and applicable rates to guarantee transparency and allow for accurate auditing.
Disputing charges
Parties who were billed (shippers and consignees) must raise any disputes within 30 days of receiving the invoice, if necessary.
Solving disagreements
After that, the party responsible for billing must address and settle the issue within 30 days. Still, the final month can be extended if there is joint consent.
How does it affect stakeholders?
The final OSRA 22 rule in 2024 guarantees greater protection against dishonest charges and assures more transparent invoices. BCOs can now expect accurate invoices on time.
Smoother billing processes result from clearer accountability for billing and fewer disputes, leading to quicker and more precise billing cycles. This effectiveness allows logistics companies to concentrate on offering reliable services instead of dealing with billing disagreements.
MTOs (Multimodal Transport Operators) are required to adhere to identical invoicing regulations as carriers to maintain a uniform billing procedure internationally.
SeaRates advice for complying with the latest rules:
1. Respond to every invoice and settle any disagreements within 30 days.
2. Maintain thorough documentation for a minimum of five years to back up adherence and conflict resolution.
3. Make sure invoices have correct details like container number, free days, rates, and contact information.
4. Utilize visibility tools. SeaRates’ Container Tracking provides you with the current status of all your cargo, so you can always be aware of any potential changes.
The bottom line
The latest regulation from OSRA 2022 made in 2024 is a great advancement in promoting openness and fairness in logistics. SeaRates advanced solutions enable shippers to track the location of their containers and access detailed audits, ensuring complete compliance. Aiming to boost your operational efficiency by meeting the latest regulations? Reach us at [email protected] for a unique offer.
