News / Blank sailings under scrutiny as US maritime commission 'looks for clarity'

13/06/2023

Following the $9.8m penalty imposed on Maersk-owned operator Hamburg Süd last week, the US Federal Maritime Commission (FMC) is to revise OSRA 22, itself a revision of the Shipping Act, to give a clearer definition of “refusal to deal”.

The FMC found Hamburg Süd in violation of the act’s provision 41104(a)(10), ‘refusal to deal’, ruling that the carrier shut out complainant OJ Commerce, a Florida-based furniture importer, in retaliation for legal action against the carrier.

The evidence was uncovered during the examination of an email exchange between Hamburg Süd employees, showing the company made the decision to “disengage” from fulfilling its contract agreements with OJC, in light of “potential litigation”.

So “clear-cut”, “knowing” and “wilful” was the violation by Hamburg Süd, said the commission, that the financial damages incurred to OJC – found by the court to be $4.9m – were doubled in the final verdict.

But the language of provision 41104(a)(10) is now under review, with the FMC issuing a Supplemental Notice of Proposed Rulemaking yesterday.

FIATA was chief among those concerned, saying many of the measures used by shipping lines to manage capacity could be co-opted for the purpose of squeezing out certain customers.

The FMC said: “The commission notes the concern from FIATA that, since carriers control capacity, they might strategically alter capacity to refuse to deal or negotiate. Cancelled sailings or schedule changes are typically driven by decreased demand, port congestion or changes in service by a vessel-sharing partner. The commission notes that, evidence that an ocean common carrier changes schedules for other purposes would result in those changes not being considered a legitimate transportation factor.”

It said it proposed changes to the transport factors definition that addresses these concerns.

However, one consultant said: “The suggestion is that the FMC might seek to intervene in carrier capacity management, which is the only tool carriers have to halt rates collapsing in weak demand periods.”