FMC Commissioners Urge Ocean Carriers to Carry U.S. Exports

FMC Commissioners Carl W. Bentzel and Daniel B. Maffei announced they have sent a letter to World Shipping Council President and CEO John Butler expressing their concern about reports that ocean carriers have recently refused to carry U.S. exports. The Commissioners noted that U.S. exporters should not bear the entire burden of volume fluctuations and surges in this unusual year for the industry and emphasized that “it is imperative that we strive for a balanced trade to keep our supply chain fully effective and efficient while maintaining vital export opportunities for the U.S. agriculture and manufacturing bases.” The Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 clearly state one of the purposes of the law is to “promote the growth and development of United States exports.”

The nineteen members of the World Shipping Council represent approximately ninety percent of global liner vessel capacity and transport approximately one hundred sixty million TEUs annually. In their letter, the FMC Commissioners also reminded ocean carriers of the Shipping Act’s section 41104(a)(10), which states carriers may not “unreasonably refuse to deal or negotiate,” as well as section 41105, which states two or more carriers may not “boycott or take any other concerted action resulting in an unreasonable refusal to deal;” or “engage in conduct that unreasonably restricts the use of intermodal services or technological innovations.”

Shippers Asked to Submit Complaints to FMC on Container Detention Issues

FMC Commissioner Rebecca Dye has advised shippers and truckers they may contact the Federal Maritime Commission’s Bureau of Enforcement (BoE) with allegations of ocean carriers and marine terminal operators employing practices or regulations in violation of the Shipping Act, 46 USC 41102(c), involving non-compliance with FMC’s regulations on detention and demurrage of international ocean cargo. Individuals with specific allegations of behavior that violates the Shipping Act when considered in the context of guidance provided in the FMC’s Interpretive Rule on Demurrage and Detention Under the Shipping Act, 46 CFR Part 545.5, are directed to submit their complaint and supporting evidence to the FMC’s Bureau of Enforcement by writing via email to: boe@fmc.gov or phoning the Bureau on +1-202-523-5783.

In April 2020, the Commission published its interpretive rule on demurrage and detention practices providing guidance to industry on how the reasonableness of detention and demurrage regulations and procedures would be assessed. Since then, the FMC reports it has received feedback from shippers and other parties critical of the level of compliance ocean carriers and marine terminal operators have shown to the new rule. Commissioner Dye issued this updated advice to the trade as part of her ongoing work conducting Fact Finding Investigation No. 29. This investigation was renewed in November 2020 when the Commission issued a supplemental order to extend and expand this investigation to consider whether alliance carriers whose vessels serve the ports of New York, Long Beach and Los Angeles are employing practices or regulations that violate the Shipping Act. No deadline has been set for the completion of this investigation. News releases have been issued monthly by the FMC and are accessible at https://www.fmc.gov/fact-finding-29/

Transpacific Eastbound Carriers File GRIs Effective January 15 and February 1, 2021

Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective January 15, 2021, including CMA CGM, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. COSCO will apply GRIs effective January 17, 2021. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The January 15th GRIs will be the second GRI of 2021 for the East Asia/USA trade lane.

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only, effective January 17, 2021.

NOTE 2: Hapag Lloyd GRIs effective January 15, 2021 is a postponement of the GRIs previously effective October 15, 2020, then subsequently November 15, 2020, and then December 15, 2020.

Some carriers updated their tariffs to include new General Rate Increases (GRIs) effective February 1, 2021, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The February 1st GRIs will be the third GRI of 2021 for the East Asia/USA trade lane.

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only.

NOTE 2: Hapag Lloyd GRIs effective February 1, 2021 is a postponement of the GRIs previously effective December 1, 2020. These GRIs had previously been postponed from effective October 1, 2020 to effective November 1, 2020, then to December 1, 2020, then to January 1, 2021, and now to February 1, 2021.