FMC Chairman addresses export container availability

Federal Maritime Commission Chairman Michael A. Khouri told an international audience that he takes seriously reports that ocean carriers are not supplying containers to U.S. agricultural exporters at inland locations and the Commission is examining all potential actions it can take in response as a regulatory agency.

Chairman Khouri made his remarks at the Global Maritime Conference, which was held virtually this year.

“Some ocean carriers – not all – have stated that they will no longer deploy – that is – reposition, empty containers to the U.S. interior agricultural areas. Instead, they are expediting empties back to Asia. This abandonment of a significant U.S. export industry – the American agricultural industry – is shutting them out of global markets. We are looking into all potential – I repeat – all potential responsive actions, including a review of whether such ocean carriers’ actions are in full compliance with the Shipping Act and more specifically the various “Prohibited Acts” sections of the Act,” said Chairman Khouri.

On November 20, 2020, the Commission approved a Supplemental Order to Fact Finding 29, that directs Fact Finding Officer Rebecca Dye, to investigate the detention and demurrage, container return and container availability for U.S. export cargoes practices of ocean carriers operating in alliances and calling the Port of Los Angeles, the Port of Long Beach, or the Port of New York and New Jersey. The Commission authorized Fact Finding 29, “International Ocean Transportation Supply Chain Engagement,” on March 31, 2020.

The availability of containers for the U.S. export trade is not the only area where the FMC is focusing its attention on the behavior of carriers. Chairman Khouri shared with the audience that in October the agency issued a Notice of Inquiry about carrier practices of how the term “merchant” is defined in service contracts. The Commission has heard from numerous stakeholders that shipping lines are using an expansive definition that holds companies responsible for ancillary transportation charges that they did not contract for and may not legally be required to pay. The Commission’s Bureau of Enforcement is conducting an investigation.

Also among the topics covered during his presentation, Chairman Khouri spoke about how carrier and marine terminal operator agreements are monitored by the Commission to ensure competition and integrity for America’s ocean supply chain. The Chairman shared that the three global ocean carrier alliances receive the highest and most demanding degree of scrutiny given their potential to cause or facilitate adverse market effects.

“The Commission continually monitors the marketplace and adjusts the reporting requirements for alliances and their members as circumstances dictate. Our monitoring efforts are an ongoing and constant endeavor but are adjusted as circumstances require. Last month, pursuant to my direction, the Federal Maritime Commission issued letters to the carrier alliances advising them of amended, more frequent, reporting requirements. This information, reported more often and in a more timely manner, will be invaluable to the Commission in its efforts to protect the marketplace,” said Chairman Khouri.

Beyond highlighting the Commission’s attention to export containers and continued monitoring of ocean carriers, Chairman Khouri highlighted the background of the FMC, a regulatory relief initiative that will allow ocean carriers to file service contracts up to 30 days after they come into effect, and priorities for the coming year.

Source: Federal Maritime Commission


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