FMC Releases Interim Protocol for Submitting “Charge Complaints”

FMC Press Release Posted July 14, 2022 -- The Federal Maritime Commission gives the following guidance for parties wishing to dispute charges assessed by common carriers that they believe may not comply with the Ocean Shipping Reform Act of 2022, which became Public Law 117-146 on June 16, 2022.

Parties interested in filing such “Charge Complaints” at the Commission may do so by following the below steps:

• Identifying the common carrier

• Identifying the specific alleged violations of 46 U.S.C. §§ 41102 and/or 41104(a)

• Gathering and submitting supporting documentation, as appropriate, including:

  • Invoices

  • Bill of Lading Numbers

  • Evidence of whether the charge(s) have been paid

• Confirming that the disputed charge was incurred on or after the enactment of P.L. 117-146

• Submitting all relevant materials in one email (if possible) to chargecomplaints@fmc.gov

When the Commission receives sufficient information, it will promptly initiate an investigation, which could ultimately result in a civil penalty and order for a refund of charges paid.

Investigations by the Commission are for law enforcement purposes and do not constitute representation as attorney for the complainant or a guarantee of refunds. If the filer chooses to pursue and control their own legal case, including with the assistance of their own attorney if desired, they may do so under 46 U.S.C. § 41301(a) and Part 502 of the Commission’s regulations.

To do so, filers must submit a formal or informal complaint. Persons may also seek alternative dispute resolution services by contacting the Office of Consumer Affairs and Dispute Resolution.

This guidance communicates the timely implementation of a self-executing provision of PL 117-146. The Commission reserves the right to amend processes related to “Charge Complaints” at any time.

FMC Mulls Issuing Emergency Order on Information Sharing

FMC Press Release Posted August 11, 2022 -- The Federal Maritime Commission is seeking public comment on whether supply chain congestion has created conditions warranting the issuance of an emergency order requiring common carriers and marine terminal operators (MTOs) to share key information with shippers, truckers, and railroads.

The Ocean Shipping Reform Act of 2022 (OSRA), enacted as Public Law 117-146, authorizes the Federal Maritime Commission to issue such an emergency order after seeking comments from the trade on three questions. First, has congestion created an emergency situation of a magnitude such that there exists a substantial, adverse effect on the competitiveness and reliability of the international ocean transportation supply system. Second, would an emergency order issued by the Commission alleviate the emergency situation. and third, what would be the appropriate scope of an emergency order issued by the Commission.

If the Commission issues an emergency order, common carriers and MTOs would be required to share directly with relevant shippers, rail carriers, or motor carriers information relating to cargo throughput and availability. An emergency order would remain in effect for not longer than 60 days, though the Commission could renew the order. Issuing both an emergency order and a renewal of an emergency requires a unanimous vote by the Commission. The Commission’s authority to issue emergency orders terminates 18-months after the June 16, 2022 enactment of OSRA.

Interested parties will have 30 days from when the Request for Public Comment is published in the Federal Register to submit their views to the Commission. Commenters should limit their observations to the need and benefits of the emergency order.

This call for public comment is the latest action the Commission has taken to meet the requirements and deadlines established by OSRA. To date, the Commission has:

• Issued a Request for Public Comment on a proposed plan for gathering import and export information from VOCCs calling the United States;

• Initiated development of a Notice of Proposed Rulemaking on Unreasonable Refusal to Deal or Negotiate on Vessel Space Accommodations;

• Established an interim process for submitting Charge Complaints;

• Prioritized enforcement activity through the establishment of the Bureau of Enforcement, Investigations, and Compliance;

• Placed the trade on notice that self-executing provisions of OSRA are in immediate effect;

• Placed the trade on notice that common carriers are required to immediately comply with detention and demurrage billing practices;

• Published the Fact Finding 29 Final Report; and

• Enhanced the resources and capabilities of the Office of Consumer Affairs and Dispute Resolution Services.

Early this month, the FMC also sought public comments on a proposed plan for gathering import and export information from vessel-operating common carriers that is responsive to a requirement established as part of Public Law 116-146, the Ocean Shipping Reform Act of 2022 (OSRA).

The law mandates the Commission collect and publish total import and export tonnage and the total loaded and empty 20-foot equivalent units (TEU) per vessel of vessels calling the United States. The law further states that ocean common carriers shall provide all necessary information to the Commission. The Commission is required to publicly report this information on a quarterly basis.

The Commission proposes collecting information on tonnage and TEUs from each identified common carrier on a monthly basis. The Commission proposes to collect information from ocean common carriers that transport 1,500 or more TEUs per month (laden and/or empty) in or out of U.S. ports in international common carriage.

Approximately 70 of the 154 currently registered vessel-operating common carriers transport 1,500 or more TEUs per month. Implementing the proposed approach will result in capturing in excess of 99% of imported and exported containerized cargo. The Commission possesses the ability to access additional information for the less than one percent of remaining data if circumstances deem it necessary to do so.

Once the Request for Public Comment is published in the Federal Register, interested parties will have 60 days to share their views with the Commission.

Last month, the FMC emphasized that Vessel-Operating Common Carriers (VOCCs) are required to comply with demurrage or detention billing practices established by the Ocean Shipping Reform Act of 2022 (PL 117-146).

As previously advised to the trade, there is no phase-in period for this provision of law. The law, and its requirements, related to demurrage and detention charges, became effective June 16, 2022.

VOCCs must come into compliance with all self-executing provisions in the Ocean Shipping Reform Act of 2022, specifically the requirements for demurrage and detention billing (46 U.S.C. 41104(d)). The Federal Maritime Commission will pursue enforcement action against any conduct perceived to establish open-ended obligations or include coercive tactics circumventing the clear direction of Congress.

New FMC Enforcement Structure

FMC Press Release Posted July 29, 2022 -- The Federal Maritime Commission is reorganizing its investigative and prosecution functions by consolidating them into a newly created Bureau of Enforcement, Investigations, and Compliance (BEIC) effective immediately.

The newly established Bureau will be headed by an attorney in the Senior Executive Service with regulatory, prosecutorial, and investigatory experience. The Commission’s Managing Director, Lucille M. Marvin, will also serve as Acting Director until a permanent Director is hired.

“Robust enforcement of the Shipping Act is absolutely key to the effectiveness of the Federal Maritime Commission. This reorganization 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 prioritize enforcement. Specifically, it enhances FMC’s capacity to closely scrutinize the conduct of the ocean carrier companies and marine terminal operators to ensure compliance with the law and fairness for American importers and exporters,” said Chairman Daniel B. Maffei.

The BEIC will be divided into three sections: the Office of Enforcement, the Office of Investigations, and the Office of Compliance. These offices will each be led by an Office Director. The BEIC Director will supervise and manage the activities of the three offices and will be supported by a Deputy Director who will assist with program management. The BEIC Director will report to the Managing Director.

The reorganization was initiated following an internal examination undertaken to identify how to increase the effectiveness of Commission enforcement and compliance activities. The review determined a restructuring and merging of enforcement and compliance programs would result in a more efficient, coordinated, and responsive operation from initiation to conclusion of an investigation.

As part of the reorganization, the Commission is converting the positions of Area Representatives to Investigators, placing them in the Office of Investigations. Additionally, the Commission will increase the number of investigators it has on staff. Investigators will now focus exclusively on enforcement activity and the public outreach function formerly handled by the Area Representative role will be handled by the Commission’s Office of Consumer Affairs and Dispute Resolution Services as part of their broader public assistance work.