FMC Amends Rule for Cruise Passengers to Get More Refund Rights

The Federal Maritime Commission is amending its regulations governing non-performance by Passenger Vessel Operators (PVO/cruise lines) and establishing new requirements for when cruise passengers should be provided refunds for cancelled or delayed voyages.

The changes define non-performance as cancelling a voyage or delaying a voyage by three or more calendar days if a passenger elects not to embark on delayed or substituted voyage offered by a PVO. The Commission also changed its regulations to allow passengers of delayed or cancelled voyages to make direct claims against financial responsibility instruments, such as bonds, maintained by PVOs, after the passenger’s unsuccessful attempt to receive a refund directly from the PVOs. Finally, the rule allows all fees, including ancillary fees, paid by a passenger to a PVO be eligible for a refund.

The changes become effective 30 days after their publication in the Federal Register and will apply to cruises booked on and after that date.

Proof of Claims for refunds from Crystal Cruises can be filed at https://crystalcruiseclaims.com/.

The deadline for filing a claim is June 11, 2022. Proof of Claim forms can be found at: https://crystalcruiseclaims.com/wp-content/uploads/2022/03/POC-Crystal-Cruises-Consumer-FinalR1.pdf

FMC Gets Legal Support From Justice Dept. to Go After Violators

The Justice Department and the Federal Maritime Commission will be aggressively going after those who violate the Shipping Act and related laws.

The Justice Department and the FMC reaffirmed on February 28, 2022, their continuing commitment to jointly enforcing competition laws and strengthening their cooperation to promote competition in the ocean freight transportation system.

FMC Chairman Daniel B. Maffei said the two agencies will strengthen the partnership formalized by the Memorandum of Understanding (MOU) in July 2021.

The Justice Department will provide the FMC with the support of attorneys and economists from the Antitrust Division for enforcement of violations of the Shipping Act and related laws. The FMC will provide the Antitrust Division with support and maritime industry expertise for Sherman Act and Clayton Act enforcement actions.

“The Justice Department will continue to aggressively enforce our antitrust laws – no matter the industry, no matter the company, and no matter the individual,” said Attorney General Garland in a press release. “Competition in the maritime industry is integral to lowering prices, improving quality of service, and strengthening supply chain resilience. Expanding joint enforcement partnerships like the partnership between the FMC and DOJ is one of our most powerful tools for promoting competition. Lawbreakers should know that the Justice Department will provide the Federal Maritime Commission all necessary litigation support as it pursues its mission of promoting competition in ocean shipping.”

“The Attorney General and I share both the priority of a competitive marketplace and a commitment to pursue enforcement actions when necessary,” said Chairman Maffei. “Our agencies have a history of cooperating to the benefit of the American consumer and this new support will help ensure that the working relationship will help both government entities in our shared goal of fair competition.”

FMC Commissioners Testify Before Congress on Shipping Reform Act

Chairman Daniel B. Maffei and Commissioner Rebecca F. Dye provided testimonies before the Senate Committee on Commerce, Science and Transportation during the “Executive Session and Ocean Shipping Reform Act Hearing” on March 3, 2022. Full-text copies of their testimonies can be found here -- Chairman Maffei and Commissioner Dye. Chairman Maffei announced that the FMC’s audit team will expand its scope to get information from carriers on their handling of exports and how to do better. The FMC's Bureau of Enforcement is especially prioritizing cases involving exporters. "In my view, the laws governing container shipping needed updates, even before the current COVID-triggered demand surge ... To be clear, any new law should minimize unintended consequences such as disruption of trade, service reductions, or needless new compliance costs. It should be a balanced approach applicable both now and in the future when we do eventually get past the supply chain disruptions and freight rates come down again," Chairman Maffei said. Commissioner Dye expressed concern that many service contracts for carriage of cargo entered into between shippers and ocean carriers lack mutual commitment. She said this ambiguity about mutual enforceability in these so-called “contracts” may cause severe consequences to shippers during times of high demand for cargo space because they are not protected with binding contracts. Commissioner Dye supports the Commission’s providing greater information to shippers on the value of mutuality of understanding and commitment in service contracting and the availability of shipper associations to leverage volume discounts for freight charges.

Commission Grants Temporary Relief to Expeditors International of Washington, Inc.

The FMC recently granted the temporary relief sought by Expeditors International of Washington, Inc. (Expeditors) from certain tariff filing requirements. Expeditors sought relief from Commission regulations as part of its response to a malicious cyberattack experienced in February 2022. The exemption is effective for 90 days, from March 8 through June 6, 2022. The Commission granted the request for exemption from relevant tariff publishing requirements subject to certain conditions. The exemption from tariff publishing requirements applies only to cargo received on or after the date of the order. Expeditors must also give shippers at least 30 days’ advance notice before applying any new or initial rate, charge, or change in an existing rate that results in an increased cost to a shipper. All service contracts and tariff changes subject to the exemption must be filed or published no later than June 6, 2022.