News / New FMC audit programme to check rule-compliance by largest ocean carriers

© Xuejingwen

The Federal Maritime Commission (FMC) launched the ‘Vessel-Operating Common Carrier Audit Program’ on 19 July in an effort to monitor compliance with the detention & demurrage (D&D) rules and to monitor ocean shipping market in the US.

Chairman Daniel B. Maffei, who formally launched the initiative, has appointed Lucille Marvin, the Commission’s Managing Director, to lead the audit programme and the audit team.

FMC commissioner Carl Bentzel told The Loadstar: “The Audit programme is the first step in the FMC effort to evaluate the actions of ocean carriers to review whether they are violating requirements issued pursuant to FMC guidelines in the implementation of penalties for D&D charges.”

While Mr Maffei explained: “The Federal Maritime Commission is committed to making certain the law is followed and that shippers do not suffer from unfair disadvantages.”

In addition to monitoring the application of the D&D regulations the new audit process will monitor the top nine carriers and, in addition to D&D practice, could include the application by companies of billing practices, appeals procedures, penalties assessed by the lines, and “any other restrictive practices,” according to an FMC statement.

“The work of the audit team will enable the Commission to monitor trends in D&D practices and revenue, as well as to establish ongoing dialogue between staff and carriers on challenges facing the supply chain,” said Mr Maffei.

“The current shipping situation is straining the intermodal supply chain in all segments. We have received numerous allegations of potential abuse, and we are in process of evaluating these claims further,” commented Mr Bentzel.

Initially the Audit will establish a database composed of quarterly reports that will allow the FMC to evaluate how D&D charges are imposed, with responses to the reports followed up with personal interviews with carriers.

All of the top nine largest carriers by market share will be audited irrespective of whether a formal or informal complaint has been filed at the Commission,” said the FMC.

Meanwhile, Mr Bentzel highlighted that the FMC were also interested in appraising other elements of the ocean shipping system that have been raised by interested parties from within the supply chain: “Separately, the FMC is continuing to evaluate conditions arising as result of Alliance activities, and recently announced a Memorandum of Understanding with the Department of Justice to potentially co-ordinate implementation of respective authorities over competition,” he said.