FMC Commissioners Testify on FMC Activities, Priorities, Etc.

Highlights of the written statement of the FMC Commissioners, presented by Commissioner Brennan, include:

FMC is Examining its Appeal/Injunction Options in Clean Trucks Case

The FMC notes that it has reviewed the Los Angeles and Long Beach Clean Trucks Program and conducted a competitive impact assessment of the Ports' Clean Trucks Program. The FMC determined that certain elements of the program would likely, by a reduction in competition, produce an unreasonable reduction in transportation service or an unreasonable increase in transportation costs and challenged the underlying MTO agreement in U.S. District Court on the basis that it violated the anti-competitive standards of the Shipping Act. The FMC notes that this is the first time it has challenged an agreement in court under the section 6(g) standard. In a ruling issued on April 15, 2009, the judge denied the FMC's request for a preliminary injunction.

Nevertheless, the FMC states that the core elements of its case under section 6(g) have been preserved for a determination on the merits. The FMC is currently examining its options as to appeal and in pursuing a permanent injunction.

(See ITT's Online Archives or 04/20/09 news, 09042020, for BP summary of the denial of the FMC's request for a preliminary injunction.)

FMC Conferred with CBP on Misdescriptions of Shipments Inbound from China, Etc.

The FMC continues to exchange enforcement information with U.S. Customs and Border Protection in accordance with the existing Memorandum of Understanding. Cooperation with CBP has expanded into joint field operations to investigate entities suspected of violating both agencies' statutes or regulations. Such cooperation often involves local police and U.S. Citizenship and Immigration Services (formerly INS) officers. FMC Area Representatives also confer with CBP regarding ongoing matters of mutual interest, such as misdescriptions of shipments inbound from China and other industry malpractices.

FMC to Use Electronic Forms, Databases, Etc. to Improve Service

The FMC Commissioners emphasized that the FMC is dependent on information technology to accomplish its mission and has set out to streamline the agency's work processes to enhance the productivity of workforce through comprehensive automation.

The FMC's Technology Plan envisions overdue modernization of the public access points to FMC services and records through the electronic forms utilized by the public, as well as the databases which support those public forms, subject to available funding. Such efforts require an overall information technology strategy with consistent funding to build on the successful efforts of past years.

Recession Resulted in U.S. Liner Import and Export Decline

According to the Commissioners, at the end of FY 2008, indications of the serious economic downturn were present as the credit and financial crises unfolded and recessionary conditions began to affect worldwide economies. In the first quarter of fiscal year 2009, U.S. liner exports dropped by 13% and imports dropped by 10%. Freight rates have also declined precipitously since the fourth quarter of 2008. In January 2009, the total volume of U.S. liner exports shipped worldwide fell 24% over January 2008, while imports fell 15% as compared to January 2008.

Containership capacity deployed on the world market continued to exceed demand, and it is forecasted that more capacity will be added to the market despite rapid declines in cargo volume. To date, roughly 11% of the global containership capacity lays idle. Concentration in the liner shipping industry remained unchanged for the fiscal year, with the top ten ocean carriers in control of about 60% of the world's containership capacity. However, additional concentration is expected to occur as a result of the global economic conditions.

FMC Commissioners' written statement available at http://transportation.house.gov/Media/file/Coast%20Guard/20090513/FMC.pdf.