The Federal Maritime Commission on June 24 alerted industry that certain provisions of the Ocean Shipping Reform Act took immediate effect when the bill became law on June 16 (see 2206160064). Some of the provisions that already took effect involve demurrage and detention invoices, which apply to “all charges and invoices over which the Commission has existing jurisdiction,” the FMC’s general counsel said in a memo. The FMC said “parties with questions related to their obligations should consult with their legal counsel.”
The Ocean Shipping Reform Act, which would punish carriers who reject exports from West Coast ports if the Federal Maritime Commission deems those decisions as unreasonable, was signed into law June 16. The FMC is directed to begin a rulemaking on the matter. The law also puts the burden of proof on the reasonableness of demurrage and detention fees on ocean carriers, rather than the parties who were charged the fees.
The June 13 passing of bill that aims to force shipping companies to accept U.S. exports on the return trip to Asia, and which further codifies Federal Maritime Commission's attempts to police detention and demurrage charges, was hailed by politicians as an inflation solution and greeted with caution by industry players.
President Joe Biden, speaking at the Port of Los Angeles, praised the collaborative work of port officials and workers and the government to break through logjams, and partly blamed foreign-owned shipping companies for rising prices.
The Federal Maritime Commission this week approved a $2 million settlement agreement with Hapag-Lloyd for alleged shipping violations involving the company’s detention and demurrage practices. Hapag-Lloyd also agreed to take several steps to improve its billing practices, including posting an updated tariff policy to its website, conducting a “training session” on the FMC’s detention and demurrage rule for all employees involved in billing, and publishing on its website a “complete list of locations that it has authorized to accept empty Hapag-Lloyd containers.”
The Federal Maritime Commission this week announced three new initiatives it hopes will aid shippers and address supply chain issues, including one that will establish a new International Ocean Shipping Supply Chain Program and another that will reestablish the commission’s Export Rapid Response Team. The FMC will also “take the steps necessary” for carriers and marine terminal operators to employ a designated FMC compliance officer.
Commissioner Rebeccca Dye of the Federal Maritime Commission this week released the final report stemming from a two-year investigation of the effects of the COVID-19 pandemic on the international ocean freight delivery system, which includes a dozen new recommendations to address supply chain and maritime logistics issues. The report, previewed by Dye last month (see 2205180056), has recommendations for mandatory FMC compliance officers, a clearer process for returning containers and a new investigation into carrier charges assessed through tariffs.
While most carriers that participated in the first round of the Federal Maritime Commission’s recent export audit have commendable export strategies, others have room for improvement, FMC official Lucille Marvin said. “I think that there is some work to do," Marvin told commissioners during a May 18 meeting. “The location of the exports, the location of the equipment -- none of this stuff is always in sync with each other. I think this is going to be an ongoing challenge that we have.”
The Federal Maritime Commission should require all ocean carriers and marine terminals to hire dedicated compliance officers, establish a clearer process for returning containers and launch a new investigation into carrier charges assessed through tariffs, Commissioner Rebecca Dye said. Dye, delivering a new set of recommendations during a May 18 FMC meeting, also said the commission should create a carrier-focused advisory committee and do more to support U.S. agricultural exports.
The Federal Maritime Commission needs cooperation from the trade and logistics community to engage in meaningful enforcement, FMC Chairman Daniel Maffei said. Speaking last week at the annual National Customs Brokers & Forwarders Association of America conference, Maffei said that he has been frustrated that "a lot of people expect the FMC to intervene on the side of small shippers" and don't understand the limits of the commission's authority.