Cotton Trade Group Urges FMC to Uphold Order Involving Unfair Equipment Provider Practices
The American Cotton Shippers Association asked the Federal Maritime Commission to uphold a recent summary decision that ordered carriers to stop adopting, maintaining and enforcing regulations or practices that "limit the ability of a motor carrier to select the chassis provider." In an amicus brief filed to the FMC May 8, ACSA said it supports the decision because agreements between ocean carriers and non-party Intermodal Equipment Providers (IEPs) place limits on the “choice in chassis provisioning for U.S. cotton exporters, thereby causing delays in the movement of cotton, creating avoidably inefficiencies, imposing needless costs, and ultimately undermining the competitiveness of U.S. cotton shipments in the global marketplace."
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The case focused on the ocean carriers' use of IEPs and whether or not their usage violated U.S. shipping regulations. The Intermodal Motor Carriers Conference argued that carriers' use of non-party IEPs was unnecessary and created extra problems leading to “additional demurrage and detention,” among other issues.
The current contract model between ocean carriers and IEPs "greatly inhibits the ability of U.S. cotton shippers to access chassis equipment," ACSA said. The association added that because of this model, "U.S. cotton exporters have neither the choice of selecting between commercial equipment providers nor of employing their own equipment to move their cargo." This led to a chassis shortage creating congestion and more problems accessing their equipment, ACSA said.
The delays and the resulting costs "are unnecessary and avoidable," ACSA said. "More importantly, the practices by which ocean carriers impose their control over chassis provisioning, and that cause these delays and costs, are fundamentally unjust and unreasonable, and stand in direct contravention of the spirit of the Shipping Act."