Several leading carriers serving the Trans Pacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective February 15, 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 15th GRIs will be the fourth GRI of 2021 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 March 1, 2021, including CMA CGM, 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 March 1st GRIs will be the fifth GRI of 2021 for the East Asia/USA trade lane.

The Federal Maritime Commission has issued a FMC Docket No. 20-22, Notice of Proposed Rulemaking (NPRM), that, if adopted, will make permanent the temporary exemption that has been in place since April 27, 2020 which allows ocean carriers to file original service contracts at the agency up to 30 days after going into effect. With this docket, the FMC is also proposing technical amendments to the service contract regulations.

The Shipping Act of 1984, as amended (46 U.S.C. 40101-41309) (Shipping Act or Act) permits ocean common carriers and shippers to enter into individual, confidential service contracts for the international transportation of cargo, and requires that these contracts be filed with the Federal Maritime Commission. Under the current regulations in 46 CFR part 530, original service contracts must be filed on or before their effective date, while service contract amendments must be filed within 30 days after they go into effect. The disparate treatment of original service contracts versus amendments was the result of a 2016-2017 rulemaking. In response to the COVID-19 pandemic and its impact on service contract negotiation and filing, the Commission granted a temporary exemption permitting original service contracts, like amendments, to be filed up to 30 days after their effective date. Based on its experience over the past nine months and in view of the perceived benefits of allowing delayed filing for original service contracts, the FMC has proposed to make the status quo permanent. Accordingly, Docket 20-22 proposes to revise the FMC service contract regulations permanently to allow original service contracts, like amendments, to be filed up to 30 days after they go into effect.

The Commission requests comments on these proposed amendments and any other amendments necessary to implement delayed filing for original service contracts. The Commission will consider all public comments before voting on final regulatory actions. Comments must be submitted to the FMC Secretary by March 22, 2021 and may be submitted via email to secretary@fmc.gov under the subject line “Docket No. 20-22, Comments on Service Contract Rulemaking.”

The Federal Maritime Commission has increased the maximum penalties assessed for statutory violations effective January 15, 2021, as required by the Federal Civil Penalties Inflation Adjustment Act of 2015. The increases are tied to the rate of inflation. Maximum penalties for knowing and willful violations of the Shipping Act increased to USD 61,820, from USD 61,098. Maximum penalties for violations that are not knowing and willful increased to USD 12,363 from USD 12,219.

One of the largest maximum penalties FMC can assess increased to USD 1,950,461 per voyage. This is the penalty authorized by the Shipping Act which is provided in 46 U.S.C. 42106 as follows.

“If the Federal Maritime Commission finds that conditions unfavorable to shipping in foreign trade as described in section 42101 of this title exist, the Commission may —

1. 1. Limit voyages to and from United States ports or the amount or type of cargo carried;
   2. suspend, in whole or in part, tariffs and service contracts for carriage to or from United States ports, including a common carrier’s right to use tariffs of conferences and service contracts of agreements in United States trades of which it is a member for any period the Commission specifies;
   3. suspend, in whole or in part, an ocean common carrier’s right to operate under any agreement filed with the Commission, including any agreement authorizing preferential treatment at terminals, preferential terminal leases, space chartering, or pooling of cargo or revenue with other ocean common carriers;
   4. impose a fee not to exceed USD 1,000,000. per voyage; or
   5. take any other action the Commission finds necessary and appropriate to adjust or meet any condition unfavorable to shipping in the foreign trade of the United States.”

The penalty fee of USD 1,000,000 shown in (4) is the amount provided in the Shipping Act of 1984 which has been increased due to inflation adjustments many times and now stands at USD 1,950,461. The FMC has also increased the fees for nine other penalties as specified in the Shipping Act. The complete list of penalties was published in in FMC Docket No. 21-01 in the Federal Register and on the Commission’s website.