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UPDATE: FMC Ends Review of Carrier Levied US Port Congestion Surcharges

The Federal Maritime Commission’s Rebecca Dye on Tuesday called for clarity on empty container return practices as well as an investigation into the “numerous charges assessed by ocean common carriers and seaports and marine terminals through tariffs.”

The recommendations were among 12 in Dye’s final report on the effects of COVID-19 on the ocean shipping supply chain.

During the two-year Fact Finding 29 investigation, Dye focused on two pandemic-related issues: the high cost of shipping cargo and demurrage and detention charges.

Despite the “numerous charges,” Dye’s report said she found no evidence of collusion about the major ocean carriers.

“Notwithstanding certain misconceptions, the current market for liner services in the trans-Pacific trade is not concentrated. Competition among ocean common carriers, among the three major alliances and among the members in each of these alliances is vigorous. The market for ocean services remains highly contestable, particularly in the trans-Pacific trade,” the report said.

“Although certain ocean transportation prices, especially spot prices, are disturbingly high by historical measures, those prices are exacerbated by the pandemic, an unexpected surge in consumer spending, particularly in the United States, and supply chain congestion, and are the product of the market forces of supply and demand.

“We have, to date, observed no indication that the current prices for liner shipping are a result of collusive or illegal conduct on the part of the major ocean carriers in our markets,” the report said.

  • An FMC international ocean shipping supply chain program.

  • A rule “to provide coherence and clarity on empty container return practices.”

  • A rule “to provide coherence and clarity on earliest return date practices.”

  • A requirement that ocean common carriers, seaports and marine terminals employ FMC compliance officers.

  • Providing information to the “shipping public about FMC competition enforcement, service contracts, forecasting and shippers associations, among other topics.”

  • Enhanced cooperation with the U.S. Department of Agriculture concerning container availability.

  • An FMC investigation into “practices relating to the numerous charges assessed by ocean common carriers and seaports and marine terminals through tariffs.”

  • A rule to “provide coherence and clarity on merchant haulage and carrier haulage.”

  • Creating a national seaport, marine terminal and ocean carrier advisory committee.

  • Reviving an export rapid response team.

  • FMC “engagement to discuss blank sailing coordination and information availability.”

  • “A reinvigorated focus on the extreme supply chain equipment dislocations in Memphis railheads, other rail facilities and other facilities around the country.”

In a statement issued by the FMC with the report on Tuesday, Dye said, “I look forward to implementation by the commission of my final recommendations, which I believe will provide badly needed clarity and consistency in certain port and supply chain operations, especially involving earliest return dates and empty container return.”

This is the second set of recommendations from the Fact Finding 29 investigation. Last July, Dye presented eight interim recommendations (PDF). All of those recommendations that did not require legislative action have been implemented, the FMC said Tuesday.

Dye said she was pleased the commission was moving forward with an “incentive principle” in its interpretive rule on detention and demurrage.

The interpretive rule is “pretty simple to understand: If the fee incentivizes cargo movement, it’s appropriate. If it doesn’t, it isn’t,” FMC Chairman Daniel Maffei has said.

“Commissioner Dye’s work leading this fact-finding investigation has been invaluable in determining ways the FMC can best assist importers and exporters to manage the supply chain challenges linked with the COVD-19 pandemic,” Maffei said in Tuesday’s release.

“I am eager to work with her and our colleagues to implement the final recommendations, which will guide the FMC in keeping big players in the ocean-shipping industry accountable.”


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