Some of the carriers serving the Transpacific Eastbound/Westbound trade lane (U.S. Imports/Exports) have recently updated their respective FMC tariffs to increase the Alameda Corridor Charges (ACC). The table below provides a summary of these charges. The ACC applies on shipments that move via rail though the ports of Los Angeles and Long Beach.

NOTE 1: CMA CGM updated the new ACC amounts in its FMC tariff for effective 21Jan2022.

NOTE 2: COSCO will apply the same ACC amounts from 2020.

NOTE 3: Evergreen updated the amount for 45ft, from USD 62 to USD 63, effective 01Jan2022.

NOTE 4: HMM updated the new ACC amounts in its FMC tariff for effective 08Jan2022.

NOTE 5: ONE had updated the ACC amounts in its FMC tariff effective 01Apr2020 and remain in effect.

NOTE 6: OOCL will apply the same ACC amounts from 2020. TPTEB amounts are USD25/50/65 per 20ft/40ft/45ft. TPTWB amounts are USD23/46/52 per 20ft/40ft/45ft.

NOTE 7: Yang Ming updated the new ACC amounts in its FMC tariff for effective 05Jan2022.

The Federal Maritime Commission has begun a formal investigation under its FMC Docket No. 21-17 to determine whether Ocean Network Express PTE. LTD. and/or Ocean Network Express (North America), Inc. are violating or have violated section 41102(c) of the Shipping Act by failing to establish, observe, and enforce just and reasonable regulations and practices relating to its application of the definition of merchant in its Bills of Lading (BL). It is alleged that ONE applied the definition of merchant so broadly as to unilaterally impose joint and several liability for freight and/or charges on a party with whom ONE was not in contractual privity and who had not consented to be bound by the terms of the BL.

This is the first enforcement action taken by FMC since it issued a Notice of Inquiry (“NOI”) to solicit public comment on the practice of Vessel-Operating Common Carriers (VOCCs) defining the merchant clause in their Bills of Lading (BLs) and how VOCCs apply such definitions to persons with whom the VOCCs may not be in contractual privity in October 2021. The Commission received allegations that certain VOCCs may be enforcing the terms of their BLs, including collection of freight and charges, jointly and severally against entities that are not party to and have not agreed to be bound by the BL.

Section 41102(c) of the Shipping Act provides that a “common carrier, marine terminal operator, or ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.”

ONE is alleged to have issued two BLs for shipments from Brazil to Houston in November 2018. Due to a commercial dispute, the cargo was not picked up until January 2019 and accrued charges. ONE filed a federal lawsuit against Greatway Logistics Group, LLC (“Greatway”), an NVOCC that was listed as the notify party on one of the BLs, demanding payment for accrued charges.

Greatway’s role in the shipments was limited to either arranging for customs clearance by a licensed customs broker for the consignee or serving only as the notify party.

ONE’s BL Terms and Conditions defines “Merchant” as “the Shipper, Consignee, owner, Person owning or entitled to possession of the Goods or of this Bill, Receiver, Holder, and anyone acting on behalf of any such person, including but not limited to agents, servants, independent contractors, non-vessel operating common carriers (“NVOCCs”), and freight forwarders.”

In the Commission’s view, ONE unreasonably defined and applied its definition of merchant to demand payment from Greatway, when Greatway was not in privity of contract with ONE, did not have a beneficial interest in the cargo, and did not assent to be bound to ONE’s BL Terms and Conditions or to be liable for payment of any charges due to ONE.

The Commission has ordered that an adjudicatory proceeding is required to determine whether ONE is in violation of the Shipping Act and FMC’s regulations by its practice of demanding payment of charges from Greatway despite Greatway not being liable for such charges. If the facts alleged are proven, this proceeding also shall determine whether civil penalties should be assessed and, if so, in what amount, and whether a cease-and-desist order should be issued.

The Federal Maritime Commission has begun a formal investigation under its FMC Docket No. 21-16 to determine whether Wan Hai Lines, Ltd. and/or Wan Hai Lines (USA) Ltd. are violating or have violated section 41102(c) of the Shipping Act by failing to establish, observe, and enforce just and reasonable regulations and practices relating to its assessment of detention charges.

This is the second enforcement action taken by FMC since it established its Vessel-Operating Common Carrier (VOCC) Audit Program to investigate ocean carrier fees and surcharges earlier this year. The first investigation, Docket 21-09, was issued against Hapag-Lloyd in November 2021 for similar alleged violations.

Wan Hai is alleged to have issued invoices for container detention charges on dates in 2021 where it offered no return locations, locations were not accepting container chassis, or appointments were unavailable for the subject containers at the Ports of Los Angeles or Long Beach, California. The invoiced party provided Wan Hai with screenshots verifying these restrictions and requested a waiver for at least 21 container shipments. Wan Hai denied the request and said it was unable to waive the charges because it did not control the appointment system. In FMC’s view, this rationalization does not justify the application of detention charges.

Section 41102(c) of the Shipping Act provides that a “common carrier, marine terminal operator, or ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.” On April 28, 2020, the Commission issued an interpretive rule in 46 CFR Part 545.5 providing guidance as to what it may consider in assessing whether a detention practice is unjust or unreasonable.

In view of the above, the Commission has decided that an adjudicatory proceeding is required to determine whether Wan Hai is in violation of the Shipping Act and FMC’s regulations by its practice of assessing detention charges when: either (a) Wan Hai failed to provide an equipment return location, (b) if Wan Hai did provide an equipment return location, the location was not accepting the container chassis; or (c) appointments were unavailable for equipment return.

Furthermore, upon such charges being disputed and evidence being produced to Wan Hai that no such appointments were available during free time, Wan Hai failed to waive detention. If the facts alleged are proven, this proceeding also shall determine whether civil penalties should be assessed and, if so, in what amount, and whether a cease-and-desist order should be issued.

The U.S. Federal Maritime Commission issued three policy statements on December 28, 2021, to provide guidance to shippers and others on bringing private party complaints before the FMC. The policy statements were issued to address barriers identified by the trade community as disincentives to filing actions with the FMC. Commissioner Rebecca F. Dye first proposed these statements as part of recommendations stemming from Fact Finding 29 (FF 29). FF 29 was initiated to identify operational solutions to cargo delivery system challenges related to COVID-19.

Docket No. 21-13: This statement clarifies that any person, including shippers’ associations and trade associations, may file a complaint with the Commission alleging a violation of the U.S. Shipping Act. Moreover, there is no requirement that the person allege that they were injured by the alleged violation. The Commission’s policy allows a person to file a complaint to protect others from potentially unlawful conduct.

Docket No. 21-14: This statement clarifies how attorney fees are dealt with in proceedings before the Commission. According to the statement, a party who brings an unsuccessful complaint in good faith is at “little risk” of being required to pay the other party’s attorney fees.

Docket No. 21-15: In this statement, the Commission outlines the proof necessary to prove retaliation complaints and clarifies which parties may bring such complaints and for what actions. A complainant alleging retaliation must show “that a carrier engaged in prohibited conduct (refusing cargo space accommodations or other unfair or unjustly discriminatory methods), with respect to a protected entity (shipper), because the protected entity engaged in protected activity (patronizing other carriers, filing a complaint, or other activities of the same class).”

The United States House of Representatives passed the Ocean Shipping Reform Act of 2021, H.R. 4996 by a vote of 364-60 on December 8, 2021.
 
The bipartisan bill, which was introduced by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) in August 2021, seeks to strengthen the U.S. Federal Maritime Commission (FMC). In particular, the bill includes many provisions that would enhance the FMC’s ability to address two main complaints of U.S. shippers throughout the pandemic, ocean carriers’ detention and demurrage practices and difficulty finding transport for exports. To tackle these issues the bill would provide the FMC with more authority and tools to initiate investigations, gather data, and even require data exchanges between ocean carriers and shippers.

The bill directs the FMC to establish rules prohibiting ocean common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention fees. Ocean common carriers and marine terminal operators would be required to certify that such charges comply with FMC regulations and would bear the burden of establishing the reasonableness of detention and demurrage fees in any complaint before the FMC.

To address export issues, the bill expands FMC’s mandate to include promoting “reciprocal trade” and would prohibit ocean carriers from “unreasonably” declining export cargo bookings.

The bill also includes reporting mandates for the FMC and ocean common carriers. The FMC would be required to annually publish all findings of false certifications of detention and demurrage charges and all penalties issued by ocean common carriers or marine terminal operators. The FMC would also be required to annually report on anti-competitive and non-reciprocal trade practices of ocean common carriers affecting U.S. oceanborne commerce.

Ocean common carriers would be required to report each calendar quarter on total import and export tonnage, as well as the total loaded and empty 20-foot equivalent units per vessel that makes port in the United States.

Aside from exports and billing practices, the bill tackles a variety of other issues including shipping exchanges. Shipping exchanges, which the bill defines as platforms, digital or otherwise, that connect shippers with ocean common carriers, would be required to register or obtain a license from the FMC.

The bill will next be considered by the U.S. Senate. It is currently pending review in the Senate’s Committee on Commerce, Science, and Transportation. If the bill passes in the U.S. Senate, it will be sent to the White House for President Joe Biden’s signature. The White House has indicated strong support for the bill. Full text of the bill is available on congress.gov.

Several carriers have updated their tariffs to include new General Rate Increases (GRIs) effective February 1, 2022, including COSCO, Evergreen, HMM Company Limited, Ocean Network Express (ONE), 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 2022 for the East Asia/USA trade lane.

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

NOTE 2: 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 3: 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.

Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective January 15, 2022, including COSCO, 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 January 15th GRIs will be the second GRI of 2022 for the East Asia/USA trade lane.

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

NOTE 2: 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 3: 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 4: 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.