The US Federal Maritime Commission (FMC) is continuing to push on unfair carrier charges as an anticompetitive burden to American shippers and importers.
Earlier this month, the FMC announce that it would require the three major liner consortia – 2M, OCEAN, and THE) to file enhanced information with the Commission in respect of pricing and capacity, in order to assist the Commission in its objective of assessing marketplace competitiveness. The Commission’s Bureau of Trade Analysis (BTA) is tasked with reviewing compliance with liner agreements and ensuring that they do not have an anticompetitive impact in the marketplace.
Then, on May 19th, the FMC received a fact-finding 29 “International Ocean Transportation Supply Chain Engagement” that included recommendations for legislative changes as well as recommendations implemented by the Commission without the need for legislative support. The 2-year investigation highlighted two broad areas of concern: high ocean freight rates, and burdensome detention and demurrage charges.
With respect to freight rates, the Commission found that recent historic highs in the costs of moving cargo, particularly from Asian trade lanes, has been the result of market forces – including pandemic supply chain disruptions and increased demand – and not the result of anticompetitive liner behavior.
On detention and demurrage, the Commission added eight new recommendations to those already made in respect of its Interpretive Rule on Detention and Demurrage, including:
- Few complaints have been filed over improper detention practices because shippers, forwarders, and other members of the value chain fear retaliation by the shipping lines. Anti-retaliation provisions need to be broadened by legislation to ensure the provisions capture potential retaliatory measures other than those directly between carriers and shippers.
- Similarly, the Commission found that parties were reluctant to bring complaints to the Commission over improper charges in the four- or five-figure range, as the costs of litigation would likely exceed any award. The FMC has recommended changes to the legislation to provide for double recovery on a finding of retaliation.
- The Commission will seek comments in advance of a further proposed rulemaking to set requirements on information that must be provided when detention or demurrage are billed.
- To clarify through amending legislation that the Commission has the power to order refund relief in addition to assessing civil penalties.
You can read the full fact-finding and recommendations here.
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