News / FMC calls for probe into new charges by ocean carriers and terminals

Commissioner Rebecca Dye Credit MPA

The Federal Maritime Commission investigation into the ocean supply chain in the US, known as Fact Finding 29, has ended with a slew of recommendations  and an admission that it lacks regulatory tools.

Commissioner Rebecca Dye writes: “The commission lacks the regulatory tools to deal with the numerous new charges imposed on US shippers and truckers by ocean carriers and marine terminals through tariffs and with other supply chain dislocations.”

According to the FF29 report, competition between carriers is fierce on both the Atlantic and Pacific trades with no antitrust issues. However, the ‘interpretive rule’, applied to detention and demurrage charges applied by shipping lines and marine terminal operators, has seen some lack of compliance around the issue of incentivising the flow of cargo through ports.

Ms Dye says the interpretive rule offers “an enforceable principle” for the applying of detention and demurrage charges, but many carriers and marine terminal operators are not complying.

The FF29 report makes 12 requests for action by government, including:

• a rule to provide coherence and clarity on empty container return practices and earliest return date practices;
• enhanced cooperation with the federal agency most experienced in agricultural export promotion, the Department of Agriculture, concerning container availability and other issues;
• a commission investigation into practices relating to the numerous charges assessed by ocean common carriers and seaports and marine terminals through tariffs;
• a rule to provide coherence and clarity on merchant haulage and carrier haulage;
• an FMC Supply Chain Innovation Teams engagement to discuss blank sailing coordination and information availability; and
• a reinvigorated focus on the extreme supply chain equipment dislocations in Memphis railheads, other rail facilities and other facilities around the country.

In addition, the FMC believes there is a need to clarify the rules around making complaints and to extend existing laws that govern the complaints procedure, such as rules against retaliation by larger companies on smaller enterprises.

Moreover, FF29 suggests a simplification of the process of complaint that would allow shippers and forwarders to make small claims as well as settle more complex issues.

Ms Dye concludes that “the most productive path forward” for ocean carriers, terminal operators and their customers is “to enter mutually enforceable and binding service contracts – true ‘meetings of minds’ – that are enforceable commercial documents.”