FMC Issues Recommendations to Address Supply Chain, Port Issues

Trade Update • AUGUST 2, 2021

The Federal Maritime Commission last week issued a series of interim recommendations to address ongoing issues contributing to congestion and other bottlenecks in the ocean transport supply chain that have been exacerbated due to the COVID-19 pandemic.

The recommendations, which resulted from a 2020 fact-finding probe headed by FMC Commissioner Rebecca Dye, aim to minimize barriers to enforcement of the Shipping Act and bolster the Commission’s ability to “facilitate fair and fast dispute resolution.”

Key Recommendations

Based on engagement over the past year with key stakeholders from all facets of the freight industry, the Commission recommends the following actions should be taken:

• Amend the legislation to protect those who complain to the Commission about potentially unlawful conduct and to broaden the anti-retaliation provision so that it applies not just to “shippers” — as it has been narrowly interpreted up to now — but to all regulated entities (e.g., marine terminal operators, freight forwarders, shippers’ agents, and motor carriers).
• Amend the legislation to authorize the Commission to order double reparations for violations of 46 U.S. Code § 41102 and develop guidance outlining the kind of circumstances under which “additional amounts” of recovery would be allowed.
• Clarify Commission policy by issuing a statement regarding three areas related to private party complaints: retaliation, attorney fees, and representational complaints, including trade associations.
• Issue a rulemaking concerning information on demurrage and detention billings.

Vessel-Operating Common Carrier Audit Program

In a related move, the Commission last month also established a new audit program and dedicated team of auditors to assess carrier compliance with the Agency’s rule on detention and demurrage as well as to provide additional information beneficial to the regular monitoring of the marketplace for ocean cargo services.

The Vessel-Operating Common Carrier Audit Program has been tasked with analyzing the top nine carriers (by market share) for compliance with the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices in the United States.