Commission Authorities and Available Services Remain in Place During COVID-19 Situation

During the current COVID-19 challenge, the FMC remains committed to fulfilling its statutory and constructive role for the U.S. economy in facilitating freight mobility in the international ocean supply chain.

A shipper may bring a complaint to the Commission for violations of the Shipping Act. That complaint is adjudicated before the Commission’s Administrative Law Judge. In addition, the Commission’s Bureau of Enforcement may investigate Shipping Act violations. The Commission encourages shippers who feel they have suffered economic damage by reason of a violation of the Shipping Act to bring their concerns to the Commission’s attention. Note that the regulated entities under the Act are non-vessel-operating common carriers, vessel operating common carriers, marine terminal operators, freight forwarders, and shippers.

An important role for the Commission is its ability to bring stakeholders in the ocean supply chain together to proactively and prospectively address problems and collaboratively agree on non-regulatory solutions. The Commission has under consideration whether this approach might be beneficial to help address supply chain bottlenecks as economic activity resumes and commerce begins to flow. This approach may help mitigate supply chain problems resulting from surges in cargo.

This collaborative approach was used by the Commission as a part of Fact Finding 28, which resulted from a petition by shippers and other stakeholders for relief from practices of vessel operators and marine terminal operators with respect to “detention and demurrage” – charges assessed to shippers for delay in picking up containerized cargo or returning containers. Shippers complained that these charges were unreasonable in how they were assessed and resolved and violated the Shipping Act.

As Fact Finding Officer, Commissioner Rebecca Dye engaged stakeholders in working teams to develop an approach that served as the basis for a proposed interpretive rule which the Commission published for public comments. The proposed rule addresses more fully how the Commission will interpret “unreasonable practices” in cases brought under the Shipping Act. The proposed interpretive rule recognizes the important role of detention and demurrage charges in incentivizing cargo movement and productive use of assets, and applies the “incentive principle” in general terms. It’s application would vary depending on the facts of a given case.

The proposed rule received over 100 comments. The Commission’s staff is finishing its review of those comments. The staff report should be ready for Commission review within the next several weeks. Given the evolving supply chain developments and the public interest in the proposed rule, the Commission will expedite its review and decision process.

In addition to adjudication, enforcement actions, possible stakeholder engagement, and rulemaking, the Commission’s Office of Consumer Affairs and Dispute Resolution Services offers stakeholders free ombuds and mediation service to help parties resolve shipping disputes and eliminate logjams in the flow of cargo. CADRS is also available to assist consumers embarking on cruises in the U.S. and cruise lines address issues and disputes arising out of the current COVID-19 pandemic with no-cost voluntary alternative dispute resolution services.

Those who wish to communicate a complaint, seek ombuds services, or share their views with the Commission may do so by contacting the agency via complaints@fmc.gov.

As a closing note, some major tradelanes are currently experiencing imbalances in empty and loaded container movements. The Commission has been in continual communication with stakeholders in the ocean supply chain to assess the magnitude of service disruption caused as a result of the logistics issues in China and its impact on ocean carriers, U.S. ports and terminals, and our importers and exporters. U.S. agricultural exporters have been especially disadvantaged by a low supply of empty refrigerated containers. Some vessel-operating common carriers have begun to reposition empty refrigerated containers to the United States in order to serve agricultural exporters. We hope that vessel-operating common carriers continue to make operational decisions that alleviate imbalances in the ocean container supply chain. As ocean commerce resumes, the Commission will continue its assessment of challenges impeding cargo delivery.