Max Vekich, a labor leader from the state of Washington, was sworn in as a Commissioner of the U.S. Federal Maritime Commission (FMC) for a term expiring June 30, 2026 on February 15, 2022.

“Commissioner Vekich assumes office when his lifelong experience working on the waterfront will be especially beneficial. He understands port and supply chain issues from the perspective of a worker on the frontlines of making cargo move. I am confident he will have many important contributions to make to the work of the Federal Maritime Commission and I am happy to welcome him as a colleague,” said FMC Chairman Daniel Maffei.

Vekich was originally nominated in June 2021, however his nomination did not proceed to confirmation. He was renominated on January 4, 2022 and confirmed by the U.S. Senate in a 51-43 vote on February 10, 2022.

“I am grateful for the President’s confidence in me and have been blessed twice in being nominated to serve on the Federal Maritime Commission. Since my first day on the waterfront my work ethic has always been keep cargo moving, and that will be my priority in executing my duties as a Commissioner. Keeping cargo moving is the mindset and emphasis needed to identify and address port and supply chain issues. I look forward to getting to work and am humbled at the opportunity to serve,” said Commissioner Vekich.

Prior to joining the Commission, Commissioner Vekich had a more than 40-year career as a longshoreman, joining the International Longshore and Warehouse Union (ILWU) in 1979. Over the course of his career, he held leadership positions within the ILWU, serving as President of ILWU Local 52 and on the ILWU International Executive Committee. He also served four terms in the Washington House of Representatives as a Democrat representing House District No. 35 from 1983 to 1991.

Commissioner Vekich earned a Bachelor of Arts in Political Science from the University of Puget Sound and an Associate of Arts from Grays Harbor Community College. He is a native of Aberdeen, Washington, but has resided in Seattle since 2004.

Commissioner Vekich replaces FMC Commissioner Michael Khouri. Commissioner Khouri was appointed by President Barack Obama in December 2009 and served as FMC Chairman from January 2017 to March 2021.

The FMC is now operating with a majority of Commissioners affiliated with the Democratic Party. Chairman Maffei, Commissioner Carl Bentzel, and Commissioner Vekich are affiliated with the Democratic Party, while Commissioner Rebecca Dye and Commissioner Louis Sola are affiliated with the Republican Party.

The U.S. Federal Maritime Commission (FMC) issued an Advanced Notice of Proposed Rulemaking (ANPRM) asking the public for comments on whether a new rule governing demurrage and detention billing practices would benefit the trade.

The FMC is considering mandating that certain information be included on invoices for demurrage and detention charges, as well as prescribing a deadline for invoice issuance. The Commission is also considering issuing guidance on how to ensure invoices for demurrage and detention are issued to the correct party and whether an explanation of the source and reason for the charge should be required. Additionally, the Commission asks for the industry’s views on whether the rule should extend to non-vessel-operating common carriers and marine terminal operators, in addition to vessel-operating common carriers.

This ANPRM was issued following Commissioner Rebecca Dye’s July 2021 interim recommendations stemming from Fact Finding 29 (FF 29). The FMC initiated FF 29 in March 2020 to study the impacts of Covid-19 on the ocean freight transportation sector.

The full text of the ANPRM, which was published in the Federal Register on February 15, 2022, includes a list of questions along with detailed response instructions. Comments received will be used to inform the Commission’s decision to issue a Proposed Rule. Comments are due March 17, 2022.

The U.S. Federal Maritime Commission held a meeting in closed session to discuss the West Coast Marine Terminal Operator Agreement (WCMTOA) and its PierPass incentive program for off-peak gate use on February 25, 2022.

The meeting was called by Chairman Daniel Maffei to discuss the WCMTOA and an amendment that WCMTOA filed permitting the continuation of the PierPass incentive program for off-peak gate use. The WCMTOA had sought to continue the program put in place in December 2021, which more than doubled fees for container moves during weekday hours but removed all fees for night and weekend moves.

The amendment was withdrawn on February 11, 2022, following sharp criticism by FMC Chairman Maffei. In a written statement issued the same day, Chairman Maffei condemned the move as profiteering.

“PierPass’s proposed fee structure generates revenue well above what is currently required to implement the program in a revenue-neutral manner. PierPass claims to be cooperating with President Biden’s port envoy but apparently only if it can rake in millions more in profits paid for by American importers,” wrote Chairman Maffei.

Chairman Maffei also called into question the very existence of the WCTMOA. “Today, it collects a Traffic Mitigation Fee that mitigates no traffic. Purportedly, it pays for WCMTOA’s members to provide off-peak gate options. However, PierPass’ operations are so opaque that it is unclear to me that it provides any public benefit that would justify its antitrust exemption,” wrote Chairman Maffei. He ended his statement by urging the WCMTOA “to consider more public-spirited actions.”

Following this criticism, PierPass issued a preliminary report finding that fees collected during 2021 were insufficient to cover their operations. According to the report, in 2021 costs to operate the program were $348.4 million, yet only $303.9 million were collected in Traffic Mitigation Fees (TMF). PierPass reported that additional gates not included in the program’s costs were also operated.

After the Commission’s meeting, Commissioner Bentzel issued a written statement echoing Chairman Maffei. “While the Commission continues its responsibilities to continuously monitor WCMTOA against our statutory and regulatory requirements, it is my view the agreement is not adequately fulfilling the purpose for which it was proposed – congestion mitigation,” wrote Commissioner Bentzel.

The FMC has not announced any action against the WCMTOA at this time.

Expeditors International of Washington, Inc. petitioned the U.S. Federal Maritime Commission (FMC) for a 90-day exemption from tariff publication requirements following a cyberattack. According to the petition, Expeditors requested the exemption “to allow time for it to cope with the consequence of a targeted cyberattack that caused it to shut down most of its operating systems globally in protection of its systems, including its ability to access and update its electronic ocean transportation rate tariffs.” The exemption was requested on February 25, 2022 pursuant to FMC regulations at 46 C.F.R. § 502.92.

Expeditors is a non-vessel-operating common carrier (NVOCC) subject to FMC’s tariff publication requirements. The cyberattack, which was detected on February 20, 2022, directly affected Expeditor’s FMC tariff. According to the filing, “NVOCC shipment documents issued by Expeditors have been directly affected, because they are linked to its tariff to ensure that rates charged conform to those in the published tariff. Without access to the tariff, those documents and related freight bills must be issued by other means, based on available rate information not affected by the cyberattack.”

Expeditors stated that the “requested exemption would apply to shipments for which a rate has been quoted in writing to a shipper, and agreed by the shipper, but which cannot be published in the tariff until the operation of the tariff has been restored.”

The FMC has approved limited tariff exemption requests in the past. The FMC granted similar petitions filed following cyberattacks on Kawasaki Kisen Kaisha, Ltd. and “K” Line America, Inc. and CMA CGM S.A., in April 2021 and October 2020, respectively.

The FMC issued a Request for Comments following the filing as required by Commission regulations. Interested parties are asked to submit comments to assist the Commission in evaluating Expeditor’s petition no later than March 7, 2022. For submission instructions, see the Notice of Filing and Request for Comments.

U.S. Federal Maritime Commissioner Rebecca Dye issued guidance on demurrage and detention complaints on February 15, 2022. This statement was issued pursuant to Commissioner Dye’s interim recommendations stemming from Fact Finding 29 (FF 29). The FMC initiated FF 29 in March 2020 to study the impacts of Covid-19 on the ocean freight transportation sector.

Small Claims Complaint:  For claims of $50,000 or less, a small claim alleging U.S. Shipping Act violations may be filed with the FMC. The complaint will be handled by a settlement officer for resolution using informal procedures. See 46 CFR Part 502 Subpart S.

Formal Complaint:  Any person may file a formal complaint to allege violations of specific sections of the Shipping Act. The complaint must be sworn and verified, and if seeking financial compensation for damages, be filed within three years of the claimed violation. Formal complaints are generally heard by an Administrative Law Judge and are reviewed by the Commission. See 46 CFR Part 502 Subpart E.

Reporting Potential Shipping Act Violations:  Individuals with specific allegations of behavior that is not aligned with the guidance provided in the FMC’s Interpretive Rule on Demurrage and Detention Under the Shipping Act should submit their complaint and supporting evidence to the Bureau of Enforcement by writing:  BOE@FMC.Gov.

The Commission’s interpretive rule outlines an incentive principle for detention and demurrage charges, which recognizes such charges are to facilitate the movement of cargo. If containers cannot move, due to container unavailability or lack of locations to return containers, for example, the Commission may deem such charges as unreasonable.

Alternative Dispute Resolution Services:  The Commission also offers alternative dispute resolution services. See the FMC’s Alternative Dispute Resolution Services homepage.

Several carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective April 1 through June 30, 2022.  Here is a table of BAF amounts posted by carriers:

NOTE 1:  CMA CGM calls the above surcharge the Bunker Adjustment Factor Surcharge (BAF03), Tariff Rule No. 010.08. Low Sulphur Surcharge IMO2020 (LSS20) is not applicable at this time.

NOTE 2:  COSCO calls the above surcharge the Bunker Charge (BUC), Tariff Rule No. 010-003.

NOTE 3:  HMM calls the above surcharge the Bunker Charge, Tariff Rule No. 2-63. HMM also filed in its FMC Tariff Rule No. 2-95, Environmental Compliance Charge (ECC), effective April 1, 2022. The ECC amounts are USD320/356/401/451 per 20/40/40HC/45ft, respectively, for destination USWC/USWC Local/IPI/MLB; and USD576/641/721/811 per 20/40/40HC/45ft, respectively, for destination USEC (all water)/USGC/RIPI.

NOTE 4:  ONE calls the above surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within Tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5:  OOCL calls the above surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate. The Fuel Cost Recovery Charge is effective March 1, 2022, until further notice.

NOTE 6:  ZIM calls the above surcharge the New Bunker Factor – Far East (NBF), Tariff Rule No. 010-NB. Service contract cargoes subject to Carrier’s published BAF and/or EBS shall not be subject to NBF. The NBF is effective March 1, 2022, until further notice.

NOTE 7:  Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 8:  Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective March 15, 2022, including COSCO, Evergreen, Ocean Network Express (ONE), and ZIM. CMA CGM filed GRIs for effective March 16, 2022.  See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The March 15th GRIs will be the sixth GRI of 2022 for the East Asia/USA trade lane.

NOTE 1:  CMA CGM GRIs will be effective March 16, 2022.

NOTE 2:  COSCO GRIs apply on all cargo moving under service contracts only. The GRIs previously effective 15Feb2022 are postponed to effective 15Mar2022.

NOTE 3:  Evergreen GRIs will be USD 1000 per 40ft dry container for dry cargo, and USD 2000 per reefer container. GRI amounts for all other container sizes are as per formula.

Some carriers also updated their tariffs to include new General Rate Increases (GRIs) effective April 1, 2022, including Evergreen, 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 April 1st GRIs will be the seventh GRI of 2022 for the East Asia/USA trade lane.

NOTE 1:  Evergreen GRIs will be USD 1000 per 40ft dry container for dry cargo, and USD 2000 per reefer container. GRI amounts for all other container sizes are as per formula.

NOTE 2:  HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

NOTE 3:  Yang Ming GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the April to June 2022 quarter. Here is a table of carriers that have posted BAF amounts:

NOTE 1:  CMA CGM calls the above surcharge the Bunker Adjustment Factor Surcharge (BAF-03), Tariff Rule No. 010.4. Low Sulphur Surcharge IMO2020 (LSS20) is not applicable at this time.

NOTE 2:  COSCO calls the above surcharge the Bunker Surcharge (BUC), Tariff Rule No. 010-001.

NOTE 3:  HMM calls the above surcharge the Bunker Surcharge (BUC) Tariff Rule No. 10-02A. HMM also filed in its FMC Tariff Rule No. 10-02F, Environmental Compliance Charge (ECC), effective April 1, 2022. The ECC amounts are USD63/125/125/125 per 20/40/40HC/45ft, respectively, for dry cargo moving via West Coast; and USD50/101/101/101 per 20/40/40HC/45ft, respectively, for dry cargo moving via East Coast, Gulf.

NOTE 4:  ONE calls the above surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within Tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5:  OOCL calls the above surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate. The Fuel Cost Recovery Charge is effective March 1, 2022, until further notice.

NOTE 6:  Yang Ming calls the above surcharge the New Bunker Charge, Tariff Rule No. 10-AH.

NOTE 7:  ZIM calls the above surcharge the New Bunker Factor – Far East (NBF), Tariff Rule No. 010-NB.

NOTE 8:  Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 9:  Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.