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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.

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