FMC Urges Carriers, MTOs to Maintain Accurate Information on Form FMC-1

Common carriers and marine terminal operators must maintain an accurate Common Carrier Tariff and MTO Schedule Registration Form (FMC-1). The Federal Maritime Commission issued this reminder earlier this month.

The FMC emphasized that any changes to information submitted through the FMC-1 must immediately be sent to the Commission.

Carriers and MTOs can face fines and other penalties if they fail to maintain a current and accurate FMC-1.

Thus, the FMC says, existing filers should review information previously submitted to the Commission to confirm it remains accurate.

New and existing filers can find additional information on their obligations in a User’s Manual available online.

The FMC uses Form-1: (a) to permit shippers and other members of the public to obtain reliable and useful information concerning the rates and charges that will be assessed by common carriers and conferences for their transportation services; (b) to ensure that carrier tariff publications are accurate and accessible; (c) to protect the public from violations by carriers; and (d) to review and monitor the activities of controlled carriers.

For questions regarding Form FMC-1, please contact tradeanalysis@fmc.gov.

FMC Wants More Comments on Unreasonable Refusal to Deal Rule

The Federal Maritime Commission will be addressing the issues commenters raised in response to the Unreasonable Refusal to Deal or Negotiate with Respect to Vessel Space Accommodations proposed (Docket 22-24) rule issued last September.

The Commission had received almost 30 comments in response to its Notice of Proposed Rulemaking (NPRM) on Unreasonable Refusal to Deal or Negotiate. The comments raised a multitude of substantive questions that demand appropriate time and further opportunity for comment to be given thorough consideration. The FMC wants additional public comments on the issues raised and will be issuing a Supplemental Notice of Proposed Rulemaking (SNPRM).

During the briefing on OSRA implementation, the Commission was advised that progress is also being made on other rulemakings ordered in the statute. Commission staff is reviewing the more than 180 public comments received in response to the Notice of Proposed Rulemaking on Demurrage and Detention Billing Requirements. Commission staff is also working on a draft proposed rule addressing Unfair or Unjustly Discriminatory Methods.

The Commission has completed its review of market conditions finding circumstances at this time do not warrant invoking Temporary Emergency Authority established under OSRA to require information sharing among supply chain participants. The Commission issued a Request for Information as was directed by the legislation and considered as part of its analysis comments it received in response.

The public continues to take advantage of the ability to file Charge Complaints, created as a provision of OSRA. The Commission has received more than 200 filings since the law’s enactment in June 2022. More than 70 Charge Complaints met the threshold requirements for being referred to investigators. Commission staff reported that the Charge Complaint process is proving successful at promoting informal settlements as well as waivers of Demurrage and Detention billings. Staff estimate that more than $700,000 in charges have been refunded by carriers since June.

The OSRA implementation briefing was followed by an update on economic and competition issues that included a discussion of the Commission’s robust monitoring program.

Commissioners were advised that both container volumes and freight rates on inbound trades have returned to essentially pre-pandemic levels. Significant amounts of containerized imports have shifted to East and Gulf Coast ports. Exports off the Gulf Coast are not enjoying parallel growth, upsetting what has been the traditional model of fairly balanced import and export volumes. The cost to ship exports remains slightly elevated compared to pre-pandemic.

The market share of MSC has increased substantially in the U.S.-Asia and U.S.-Europe trades over the past two years. Both MSC and Maersk have substantial market shares and have been offering additional services outside their alliance. Despite growth of alliance carriers, non-alliance carrier market share has been consistent on the U.S.-Europe trade and trending upward somewhat on the U.S.-Asia trade.

The U.S. trades are seeing the abandonment of the marketplace by new entrants that began calling during the height of the pandemic. Those lines, typically smaller companies that operate in the Intra-Asia, Oceania, and Africa markets, redeployed ships to the transpacific trade lane when cargo was abundant and rates were historically high. With volumes and rates returning to more typical and traditional levels, there is no longer the incentive for these carriers to operate in what is not their usual markets. Despite the withdrawal of these carriers, more than sufficient capacity exists to serve U.S. shippers.

The Commission met in closed session last week to receive a more detailed briefing on economic and competition matters that included business confidential information that could not be discussed in open session.

FMC Probing Shipping Lines’ Anti-Retaliation Compliance

FMC Press Release Posted December 15, 2022 -- The Federal Maritime Commission is asking the top 20 shipping lines calling the United States to provide information on how they are complying with the new prohibitions on retaliation established by the Ocean Shipping Reform Act of 2022 (OSRA).

The added protections against retaliation were created by Section 5 of OSRA and became effective immediately upon the law’s enactment in June. The prohibitions apply to common carriers, marine terminal operators (MTO), and ocean transportation intermediaries.

The Commission’s Vessel-Operating Common Carrier (VOCC) Audit Team is examining how ocean carriers are adapting to the increased prohibitions on retaliatory and discriminatory behavior. The Team will specifically focus on how companies are training personnel at all levels to act legally, and how those same employees are being made aware of the consequences for violating the law.

“The Ocean Shipping Reform Act made it clear that it is absolutely illegal for ocean carriers to discriminate or retaliate against a shipper for filing a complaint or challenging a charge. The FMC will thoroughly investigate any allegation of illegal behavior and prosecute aggressively when warranted. This is something that everyone in a company, from the newest sales associate to the CEO, must understand and that is why the VOCC Audit Team is carrying this message directly to ocean carriers serving the United States. Even a simple verbal threat to a shipper from an ocean carrier employee could undermine U.S. law and will not be tolerated,” said Chairman Daniel B. Maffei.

The examination began earlier this week via correspondence and all recipients will have until mid-January to provide their initial responses. Additionally, the VOCC Audit Team will discuss this topic in person and in deeper detail with the 11 largest carriers participating in the next round of meetings through the VOCC Audit Program.

The top 11 carriers were reached through their designated compliance officer. One of the Final Recommendations Commissioner Rebecca Dye made at the administrative conclusion of Fact Finding 29 in May was that all ocean carriers and MTOs designate a Commission compliance officer who reports directly to the most senior executive responsible for business in the United States. Each of the companies participating in the VOCC Audit Program voluntarily responded promptly and positively to this recommendation.

The VOCC Audit Program was established in July 2021 by Chairman Maffei with the initial mandate of assessing ocean carrier compliance with the FMC’s rule on demurrage and detention. In March 2022, Chairman Maffei ordered the program’s scope expanded to also evaluate how shipping lines serve U.S. exporters. The VOCC Audit Program allows the Commission to engage ocean carriers directly and frequently to raise and resolve issues of concern.