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.

FMC Bares Interim Procedures for Processing Charge Complaints

FMC Press Release Posted December 1, 2022 -- The Federal Maritime Commission disclosed its interim procedures to review, investigate, and adjudicate Charge Complaints.

U.S. shippers have responded positively to the new opportunity, established via the Ocean Shipping Reform Act of 2022, to challenge carrier charges by filing Charge Complaints at the FMC. Since the law’s enactment in June, the Commission has received more than 175 filings. The process being shared clarifies the interim steps the Commission will take under this new authority.

Under the announced process, a Charge Complaint that is “perfected” with sufficient information and details is promptly investigated by FMC staff in the Office of Investigations. The common carrier will be contacted by Commission staff as part of the investigation and asked to respond to the complaint, and justify the charge or fee being investigated. Both parties are notified at the conclusion of the investigation.

If the investigation supports a finding that the common carrier’s charge is not in compliance, the Office of Enforcement will recommend that the Commission—the five Commissioners as a body—issue an “Order to Show Cause” to the common carrier under 46 C.F.R. § 502.91 to formally adjudicate the Charge Complaint. The common carrier receiving the Order must show why it should not be ordered to refund the fees or charges paid or waive the fees in question. The Commission will issue a decision on the Order to Show Cause, and for charges not in compliance with the law, will order a refund or waiver. The Commission may then also initiate a separate civil penalty proceeding with Commission’s Administrative Law Judge for consideration of penalties under 46 U.S.C. §§ 41107 and 41109.

An initial determination to not refer a Charge Complaint to the Office of Enforcement does not bar a party from filing a subsequent small claim or formal complaint with the Commission. A party may also seek alternative dispute resolution services by contacting the Commission’s Office of Consumer Affairs and Dispute Resolution Services.

The Commission’s Bureau of Enforcement, Investigations, and Compliance reviews all information received on alleged violations of the law and uses its prosecutorial authority to bring actions against parties operating unlawfully.

The guidance is posted on the Commission’s Ocean Shipping Reform Act of 2022 Implementation page that provides a detailed explanation of the Charge Complaint process as well as answers to Frequently Asked Questions on this topic.

This announcement is a necessary step in advising the public on the interim procedures that allow the Commission to continue to take prompt action to adjudicate Charge Complaints. Experience gained from these first proceedings will guide the Commission on what form a permanent process should take. A new permanent procedure would be completed through a formal rulemaking after notice and public comment.

Dialogue on FMC OSRA Rulemaking Process Set for Dec. 15

Members of the National Association of Waterfront Employers (NAWE) will have an opportunity to participate in an open dialogue regarding the FMC's Ocean Shipping Reform Act of 2022 (OSRA) Rulemaking Process this December 15, 2022. Commissioner Carl Bentzel will be the keynote speaker at the NAWE Annual meeting, which will take place December 14-15, 2022, at The Mayflower Hotel in Washington, D.C. Commissioner Bentzel will provide NAWE members with an update to the FMC's efforts to implement its OSRA 2022 authorities through the rulemaking process. The Association, for its part, will provide insights on NAWE's strategy to mitigate the risks to marine terminal operators arising from the Commission's efforts. The meeting will also discuss the associated challenges that have arisen from OSRA 2022, including numerous federally-mandated data collection efforts aimed at ocean carriers and marine terminal operators, and a notable increase in demurrage and detention enforcement actions and reparations claims. Interested parties can track the status of OSRA implementation.

Maffei Visits Bay Area for Congressional & Industry Meetings

FMC Press Release Posted November 15, 2022 -- Chairman Daniel B. Maffei traveled to the San Francisco Bay Area on October 31 and November 1, 2022 for a series of meetings exploring shipping, supply chain, infrastructure, and technology issues. The visit began with Chairman Maffei participating in a Congressional roundtable discussion held Monday, October 31st in Oakland and led by Representatives Jim Costa, Mike Thompson, Barbara Lee, and John Garamendi. Panelists from key agencies at the federal and state levels were present to discuss progress on addressing supply chain challenges. Panelists also heard from shippers and other supply chain participants about issues they continue to have with ocean transportation services. “I applaud these Members of Congress for the interest they have taken in shipping and their determination that ocean carriers do a better job of serving U.S. shippers, especially agricultural exporters. The experiences and frustrations their constituents have endured the past two years are why the Ocean Shipping Reform Act of 2022 was passed quickly and overwhelmingly. I am committed to implementing OSRA in a manner that is punctual and reflective of Congressional intent. This roundtable demonstrates continuing Congressional attention to the supply chain as well as how ocean carriers conduct themselves in the marketplace,” said Chairman Maffei. Also on Monday, the Chairman met with Danny Wan, Executive Director of the Port of Oakland, and his key senior maritime operations staff to discuss the Port’s vital role in supporting U.S. agricultural export shippers. Approximately 50% of Oakland’s volumes are export shipments. The Chairman toured the port as part of his visit, seeing firsthand terminal operations and sites the Port plans on developing to increase its abilities to serve all shippers. “Oakland is a vital and preferred gateway for export shippers based not only in California but deep into the Heartland of the United States. Identifying what steps can be taken to improve the frequency and certainty of vessel calls at Oakland is something the Commission might be able to explore through our Vessel-Operating Common Carrier Audit Program,” said Chairman Maffei. On Tuesday, November 1st, the Chairman traveled across the Bay to meet with Willie Adams, the President of the San Francisco Port Commission, Elaine Forbes, the Executive Director of the Port of San Francisco, and key port leadership staff to discuss that facility’s maritime business. The Port of San Francisco serves cruise, bulk, project, and auto trades and is working to bring more business to their maritime operations. Ms. Forbes and her staff outlined investments they are making in facilities improvements, including upgrading their electrical grid, improving road access to industrial port facilities, and identifying new opportunities to grow their maritime business. Also addressed were plans the Port has for addressing sea level rise and protecting the port and parts of the city vulnerable to flooding and storm surges. “Supply chain congestion revealed to people outside of the maritime sector the tremendous value and concerning scarcity of port capacity. The Port of San Francisco recognizes and is acting on the opportunity to grow their industrial maritime business, increase service offerings to cargo shippers, and increase utilization of their cargo facilities. Mr. Adams, Ms. Forbes, and the Port staff are to be commended for their leadership in prioritizing improvements to their industrial operations. I was also impressed by how strongly the Port’s cruise business has recovered from COVID. The number of passengers visiting San Francisco has in some months exceeded pre-pandemic levels. Pleasure cruising is an important part of many cities’ tourism sectors. I am certain the expanded rights to a refund the Commission created earlier this year is providing consumers the necessary confidence to book cruise voyages,” said Chairman Maffei. Chairman Maffei finished his visit to the Bay Area by meeting with the Chief Executive Officers of Cargomatic and FlexPort, two supply chain technology companies innovating how shippers move ocean cargo. Topics of conversation covered not only their respective business models, but their experiences serving customers the past two-years, and their observations about trends in trade, shipping, and the economy.