FMC Requests Comments on Possible Changes to Regulations Governing Cruise Lines

The U.S. Federal Maritime Commission (FMC) has voted to issue an Advance Notice of Proposed Rulemaking (ANPRM) to request information about possible changes to regulations governing the definition of “non-performance” by a cruise line and the process for obtaining a refund when a cruise vessel does not sail as scheduled. The notice will be published in the Federal Register and will provide for a 30-day comment period.

This action was based on recommendations made by FMC Commissioner Louis E. Sola in his recent Fact Finding 30 Interim Report. In this report Commissioner Sola recommended that the FMC interpret “non-performance of transportation” to include cancelling a sailing or a delay to passenger boarding of twenty-four hours or more, and also recommended that the Commission change its regulations to make clear how passengers may obtain refunds under a cruise line’s financial instruments filed with FMC. The report also highlights the economic impacts of COVID-19 on passenger cruise lines, ports and cities throughout Florida where cancelled sailings have resulted in a substantial loss of revenue to public ports, state and local governments, and private companies that do business with cruise lines.

Individuals may share comments responsive to this ANPRM via secretary@fmc.gov While all parties are welcome to provide comments in response to this ANPRM, filings should not be complaints regarding individual cruise experiences; complaints may be sent to complaints@fmc.gov At the end of the 30-day public comment period, the Commission will consider the comments received and what further actions should be taken.

FMC Reviews Ocean Carrier Issues, Global Alliances, and Market Developments

Market trends in trade lanes serving the United States and actions taken by both individual ocean carriers and carrier alliances in response to COVID-19 and related impacts to the ocean transportation industry were the topics of a non-public meeting of the Federal Maritime Commissioners on September 16, 2020.

The FMC Commissioners regularly hold meetings to receive updates on international trade, the container shipping industry, and to review analysis of the carrier agreement monitoring activities of the FMC staff. This year the agency has heightened its scrutiny of markets, individual ocean carriers, and carrier alliances in response to the unusual circumstances and challenges created by the COVID-19 pandemic. The FMC reviews trends in spot rates, service contracts, utilization of equipment, cancelled sailings, revenue trends, reports submitted by alliances and agreements that operate subject to FMC jurisdiction and the policies of individual carriers and alliances for service changes and notices that must be provided to the FMC when scheduled sailings are cancelled.

In a recent press release, the Commission advised if there is any indication of carrier behavior that might violate the competition standards in the Shipping Act, the Commission will address these concerns promptly with the carriers. If necessary, the FMC will go to federal court to seek an injunction to enjoin further operation of the non-compliant alliance agreement.

Transpacific Eastbound Carriers File GRIs Effective October 15 and November 1, 2020

Several leading carriers serving the Trans Pacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective October 15, 2020, including American President Lines (APL), CMA CGM, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant Marine, Ocean Network Express (ONE), and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The October 15th GRIs will be the twentieth GRI of 2020 for the East Asia/USA trade lane.

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

Some carriers updated their tariffs to include new General Rate Increases (GRIs) effective November 1, 2020, including American President Lines (APL), CMA CGM, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant, Ocean Network Express (ONE), and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The November 1st GRIs will be the twenty-first GRI of 2020 for the East Asia/USA trade lane.

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