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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.

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