In response to complaints from the trade and market in general, the Federal Maritime Commission’s (FMC) focus has been on assisting US importers with several issues such as demurrage and detention, ocean carrier freight pricing, container dwell times etc.. Some carriers were already being investigated by the FMC for container detention issues.
In line with these complaints and concerns, the FMC also established a carrier audit program and set up a dedicated audit team 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 Audit Program was set up to analyze 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 and to establish industry best practices..
In the recent past, there have also been complaints that ocean carriers have been shunning US exporters..
US exporters may have some support now as the FMC has announced on the 21st of March 2022, that it is expanding its scope to also evaluate how shipping lines are serving U.S. export shippers..
“American exporters deserve access to ocean transportation to sell to international markets every bit as much as overseas sellers get access to U.S. markets.
The FMC’s expanded ocean carrier Audit Program will provide better visibility into which ocean carriers work well with U.S. exporters, and more importantly, which ocean carriers can and should do more to support exporters.
If the shipping companies continue the cooperative attitude they have by and large shown the Audit Team to date, I am confident we can make progress on some of the issues that have frustrated exporters.
That said, the Commission is committed to an ocean transportation system that serves exporters as well as importers and I will not rule out any action within the bounds of the law that helps us achieve that goal,” said Chairman Maffei announcing this expansion in scope..
“Since its launch, the VOCC Audit Program has collected information on detention and demurrage policies from the nine largest ocean carriers by market share, provided briefings to ocean carriers on the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices, communicated best practices with ocean carriers, and continues to receive quarterly data on detention and demurrage metrics,” the announcement by FMC said..
Lucille Marvin, the Commission’s Managing Director, continues her leadership of both the VOCC Audit Program and the VOCC Audit Team..
Chairman Maffei has reportedly already assigned an advocate to the Office of Consumer Affairs and Dispute Resolution Services (CADRS) to assist export shippers and has directed the Bureau of Enforcement (BoE) and CADRS to prioritize any cases involving exporters..
The BoE will be initiating an examination of the conduct of five independent container ship lines in terms of the service those companies offer American exporters.. These shipping lines are said to be ad hoc carriers who have entered the US trade lanes taking advantage of the high freight rates seen in the market since the pandemic began..
“All ocean carriers calling the United States have an equal obligation to conduct themselves in accordance with the law. New entrants to the market—including the so-called pop-up carriers—have all the same responsibilities as companies that have served the U.S. trades for decades. We are especially interested in how the identified companies plan to serve the U.S. export market and how those business models comply with requirements under statute,” added Chairman Maffei..
The carriers in question will be subjected to specific information relating to the number of vessel calls made and the number of containers they have loaded out of the USA since 2021, based on which the BoE will assess further actions..
This extension in scope is clearly putting the spotlight on carriers only interested in bringing in imports into the USA to take advantage of the rising freight rates, but not interested in carrying out export full containers..