News / FMC sets up enforcement bureau 'with teeth' to police new shipping act

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The US Federal Maritime Commission (FMC) has set up a Bureau of Enforcement, Investigations and Compliance (BEIC) to enforce the new Ocean Shipping Reform Act.

The development will establish ‘a body with teeth’ to enforce the OSRA 22 initiative signed into law by President Biden in June.

The Bureau will comprise an Office of Enforcement, Office of Investigations and an Office of Compliance. An attorney in the senior executive service, with regulatory, prosecutorial and investigatory experience, will be found to lead it.

“Robust enforcement [of OSRA 22]… is absolutely key,” said FMC chairman Daniel Maffei. “This reorganisation has the support of all five commissioners and creates a structure better suited to meeting the mandate the president and Congress have given this agency to prioritise enforcement.

“Specifically, it enhances FMC’s capacity to closely scrutinise the conduct of the ocean carrier companies and marine terminal operators to ensure compliance with the law and fairness for American importers and exporters,” he added.

Sentiment is mounting that shipping lines have benefited from a unique coalescence of protections, and an unusual lack of competition oversight.

“Container shipping lines enjoy unique political protections and patronage with generous tax breaks, state support schemes and anti-trust protections other sectors of industry can only dream of,” said James Hookham, secretary general of the Global Shippers’ Forum (GSF).

Mr Hookham told The Loadstar OSRA “rocks”, though he added the regulations could have gone further.

“OSRA provides new powers to the FMC and shippers’ representatives to challenge behaviour and practices that may distort the container shipping market.

“The US Congress has realised that, while a healthy, competitive shipping industry is essential for international trade, some of its privileges may have gone too far… [Congress] could have gone further and questioned why shipping lines still need these exemptions (or antitrust immunities) from general competition rules in the first place.

“The impact of lines’ behaviour on inflation, consumer satisfaction and economic performance has exposed the one-way flow of benefits from these concessions.

“Shippers now expect this level of scrutiny and scepticism to be at least matched by the EC in the now overdue review of its equivalent legislation, the Consortia Block Exemption Regulation (CBER)”.

Late last month, FIATA warned that OSRA 22 would offer only “a limited window” for freight forwarders to represent their interests in discussions with the FMC.