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.

FMC Data Initiative Meetings Continue

Commissioner Carl W. Bentzel continues to lead meetings about the Maritime Transportation Data Initiative (MTDI) at the direction of Chairman Daniel B. Maffei. The MTDI is examining the data generated by a container from its arrival at a US port to its destination. To date, Commissioner Bentzel has heard from beneficial cargo owners, drayage truckers, chassis providers, providers of warehousing, distribution, and third-party logistics services, members of the railroad industry, Federal Agencies, and OTI Representatives. The meeting with Longshore Labor was held March 8, 2022, with Dennis A. Daggett, Executive Vice President of International Longshoremen’s Association; Dane Jones, Clerks’ Technology Coordinator of International Longshore & Warehouse Union; Michael A. Podue, President pf International Longshore & Warehouse Union, Local 63; and Alan A. Robb, Assistant General Organizer of International Longshoremen’s Association, as Scheduled Participants. The meeting with FedEx, UPS, and Amazon was held February 22, 2022, with Cynthia Allen, Vice President Regulatory Affairs & Compliance of FedEx Logistics; Steve McMichael, Vice President of UPS Ocean; and Adnan Quadri, Director, Global Imports-Network Planning and Infrastructure of Amazon, as Scheduled Participants. The meeting with Large Aggregators was held March 1, 2022, with Phil Denning, Vice President U.S. Sea Logistics Operations of Kuehne + Nagel Inc.; Steve Lee, Vice President of Regulatory & Trade Compliance of Flexport; and Chris Penley, Director Global Operations of C.H. Robinson, as Scheduled Participants. This initiative has three key goals: cataloging the status quo in maritime data, storage, and access across the transportation chain; identifying key gaps in data definitions/classification; and developing recommendations for common data standards and access policies/protocols. The MTDI will culminate in a Data Summit tentatively scheduled for June of this year.

Closed Meeting on WCMTOA

The FMC held a meeting in closed session on February 25, 2022, to discuss the West Coast MTO Agreement (WCMTOA). The meeting was called by Chairman Daniel B. Maffei. The original agenda called for a discussion of both WCMTOA and an amendment WCMTOA filed permitting the continuation of an incentive program for off-peak gate use. The amendment was withdrawn by PierPass. PierPass operates under authority granted through WCMTOA. The Commission closed this meeting for several reasons including because business and proprietary information filed pursuant to agreement monitoring requirements was discussed.

Max Vekich Sworn-In as FMC Commissioner

FMC Press Release Posted February 15, 2022 -- Max Vekich was sworn-in as FMC Commissioner for a term expiring June 30, 2026.

First nominated by President Joseph R. Biden on June 24, 2021, and then again on January 4, 2022. He was confirmed by the United States Senate on February 10, 2022, and is the 43rd person to serve on the Federal Maritime Commission.

“Commissioner Vekich assumes office when his lifelong experience working on the waterfront will be especially beneficial. He understands port and supply chain issues from the perspective of a worker on the frontlines of making cargo move. I am confident he will have many important contributions to make to the work of the Federal Maritime Commission and I am happy to welcome him as a colleague,” said Chairman Maffei.

Prior to joining the Commission, Commissioner Vekich had a more than 40-year career as a longshoreman, joining the International Longshore and Warehouse Union (ILWU) in 1979. Over the course of his career, he held leadership positions within the ILWU, serving as President of ILWU Local 52 and on the ILWU International Executive Committee.

“I am grateful for the President’s confidence in me and have been blessed twice in being nominated to serve on the Federal Maritime Commission. Since my first day on the waterfront my work ethic has always been keep cargo moving, and that will be my priority in executing my duties as a Commissioner. Keeping cargo moving is the mindset and emphasis needed to identify and address port and supply chain issues. I look forward to getting to work and am humbled at the opportunity to serve,” said Commissioner Vekich.

This is not the first time Commissioner Vekich has entered public service. He served four terms in the Washington State House of Representatives, from 1983-1991, where he chaired the Commerce & Labor, Trade & Economic Development, and Agriculture committees.

Commissioner Vekich earned a Bachelor of Arts in Political Science from the University of Puget Sound and an Associate of Arts from Grays Harbor Community College. He is a native of Aberdeen, Washington, but has resided in Seattle since 2004. He is married to Marcee Stone-Vekich and survives his first wife Ivy Frost Vekich. He is the father of two children and one stepchild.