Although some port situations have improved, exporters are still facing a range of challenges moving products out of terminals due to complications caused by the COVID-19 pandemic, including equipment shortages and high ocean freight rates, shipping industry officials said. The problems caused by the pandemic have even forced some companies to change their long-term export strategies and reassess how they work with ocean carriers.
Kenya recently launched a single window system for all arrivals and departures through the Port of Mombasa, the Hong Kong Trade Development Council reported June 17. As of June 2, all licensing shipping lines and agents had to begin using the new Kenya Maritime Single Window System, which allows for the “one‑off submission” of pre‑arrival and pre‑departure declarations to government agencies at Mombasa port, HKTDC said. The system is expected to help traders “substantially” reduce times loading and unloading cargo, decrease port congestion and lead to savings on demurrage charges by “accelerating cargo throughput.”
Members of Congress told the Federal Maritime Commission that they are hearing again and again about exporters being denied the opportunity to send their goods across the water, either directly, or with last-minute cancellations or unreasonable expectations on time to load, and so they asked why the FMC cannot solve these problems.
Shipping regulations should be revised to allow the Federal Maritime Commission to better address unfair detention and demurrage fees, agricultural export issues and a range of other shipping problems at U.S. ports, FMC Chair Daniel Maffei said. While he didn’t propose any concrete changes, he said he is “frustrated” with the situation at the nation’s ports and is speaking with Congress about potentially proposing regulatory changes. “I'm not prepared to go into any details now, but I do think that some things clearly need to be clarified,” Maffei said during a May 5 National Customs Brokers & Forwarders Association of America conference. “There are many, many areas where the law is vague or so outdated because it simply was written mostly in the time of tariffs, and now it's mostly contracts.”
Nearly 300 agriculture groups and companies urged the Department of Transportation to intervene as carriers continue to decline shipments of agricultural exports. The agency should “utilize all existing authorities” and help the Federal Maritime Commission “in expediting its enforcement options” to deal with the carriers, the groups said, which are sending empty containers back overseas rather than filling them with exports because the carriers can charge higher rates for imports (see 2103050014).
The Federal Maritime Commission met this week with lawmakers and held a separate closed session to discuss its investigation into maritime port issues and reports of carriers declining to accept U.S. exports (see 2011200024). The meetings were the first held under the FMC’s new chairman, Daniel Maffei (see 2103310004), and included an update on the “challenges to the freight delivery system,” the FMC said April 7. Trade groups have complained of unfair detention and demurrage fees and other port issues for months (see 2011170041).
President Joe Biden tapped Daniel Maffei to be the new chairman of the Federal Maritime Commission, the FMC announced March 30. Maffei, a sitting commissioner, replaces Michael Khouri, who was designated to head the FMC by President Donald Trump in 2019. Maffei takes over during a pivotal time for the commission, which is investigating unfair detention and demurrage practices by ocean carriers and other port issues caused by the pandemic (see 2102250039). “Due to the effects of COVID-19 and an unprecedented import boom, we are dealing with serious challenges to America’s international ocean transportation system -- challenges that the FMC has a vital role in addressing, both on its own as an independent agency and in cooperation with other agencies,” Maffei said in a statement. He is a former House member, representing New York.
The Federal Maritime Commission told lawmakers that it is still investigating port issues caused by the COVID-19 pandemic (see 2102020050 and 2102250039), including unfair detention and demurrage fees and reports that carriers are declining to carry U.S. agricultural exports. The FMC has “yet to make any final determinations” on those issues but will take action against any “practices that violate the law,” the commission said in a March 17 letter to House members released this week.
More than two dozen lawmakers urged the Federal Maritime Commission to penalize ocean carriers for declining to carry U.S. exports, saying the practices may violate shipping regulations and should be met with enforcement actions. Ocean carriers are denying bookings to U.S. exporters because the carriers can charge more for imports, 24 senators from both sides of the aisle said in a March 2 letter. In a separate letter, Rep. Kim Schrier, D-Wash., said the practice is “extremely harmful” to U.S. farmers, especially apple and pear exporters in Washington state.
The Port of Los Angeles launched a digital tool to allow traders to access truck capacity information and track cargo, which should help shippers and cargo owners better “predict and plan” cargo flows. The “Control Tower” data tool, launched Feb. 24, provides traders “snapshots” of truck turn times at the port’s terminals and “recent and future trending volume data,” the port said. Updates throughout the year will add more features. Port Executive Director Gene Seroka said the tool will help “get critical and reliable information to San Pedro Bay port stakeholders so that they can improve decision making and efficiencies.” The port is among many that have struggled to relieve container congestion since the start of the COVID-19 pandemic, leading to a rise in detention and demurrage fees (see 2102090028).