The U.S. Federal Maritime Commission (FMC) met on September 21, 2022 in open and closed session to discuss the Ocean Shipping Reform Act of 2022 (OSRA-2022) and the Maritime Transportation Data Initiative (MTDI) led by Commissioner Carl Bentzel. 

Commissioner Bentzel briefly discussed his work on the MTDI. After holding 18 public meetings from December 2021 to June 2022 with different industry stakeholders to discuss data challenges across the maritime supply chain, Commissioner Bentzel drafted data and standardization recommendations. The draft is currently being circulated for comments among MTDI participants. Commissioner Bentzel plans to release public recommendations in the near future. When questioned on the need for government intervention in maritime data standards, Commissioner Bentzel expressed his strong belief that a government-led initiative for maritime data standardization is not only needed, but will be welcomed by the industry.

Commission staff reported on progress in implementing OSRA-2022 and discussed the Notice of Proposed Rulemaking (NPRM) on demurrage and detention billing requirements that is anticipated to be issued in October. This NPRM, which was originally issued in February 2022 in FMC Docket No. 22-04, will further clarify the minimum information required for demurrage and detention invoices as well as further define prohibited practices by common carriers, marine terminal operators, shippers, and ocean transportation intermediaries regarding the assessment of demurrage and detention charges. The NPRM is expected to address to which parties and in what timeframe demurrage and detention invoices may be issued.

Commission staff also reported that the FMC will begin using Regulations.gov for all its rulemaking activity in the near future. This platform is already in use by many other federal agencies. The FMC hopes it will make filing comments, tracking, and finding information about Commission rulemakings easier and more streamlined for the public.

In the closed session of the meeting, Commissioners discussed the NPRM on demurrage and detention billing requirements and work to establish a permanent process for handling Charge Complaints.

The U.S. Federal Maritime Commission (FMC) issued a Notice of Proposed Rulemaking (NPRM) in FMC Docket No. 22-24 seeking comments on proposed elements required to establish an unreasonable refusal to deal or negotiate with respect to vessel space. Under the Ocean Shipping Reform Act of 2022 (OSRA-2022) an ocean common carrier shall not unreasonably refuse to deal or negotiate with respect to vessel space accommodation. The Commission proposes that shippers alleging an unreasonable refusal to deal with respect to vessel space accommodation for imports or exports would be required to meet the following three elements:

1. That the respondent is an ocean common carrier;
2. That the respondent refuses to deal or negotiate with respect to vessel space; and
3. That the refusal is unreasonable.

Upon establishment of these three elements, the burden of proof would shift to the ocean common carrier to establish why it was not unreasonable to refuse vessel space to a particular shipper. The NPRM includes a non-exhaustive list of factors that the FMC would consider when deciding whether a refusal was unreasonable. These factors include, whether the ocean common carrier followed a documented export strategy, engaged in good faith negotiations, and articulated legitimate transportation factors when refusing the shipment. Transportation factors may include the character of the cargo, vessel safety and stability, operational schedules, and the adequacy of facilities. A common carrier granting special treatment to one party over another because that party is a regular customer is likely to be viewed as unreasonable

Comments on FMC Docket No. 22-24 are due October 21, 2022. For detailed comment submission instructions, see the Federal Register notice.

The U.S. Department of Transportation (DOT) issued a Request for Information on the use of inland ports for storage and transfer of cargo containers on September 26, 2022. The DOT requests comments and information from representatives from across the supply chain, as well as the general public, pertaining to the feasibility of, and strategies for, identifying Federal and non-Federal sites for storage and transfer of cargo containers. The request was issued to assist the DOT in preparing a report to Congress on container storage which is required under the Ocean Shipping Reform Act of 2022 (OSRA-2022).

Specifically the DOT requests comments on the below four questions.

1. As far as solutions to address congestion are concerned, how much utility do you see in identifying additional space for the storage and transfer of intermodal containers? What, if anything, would you prioritize above additional storage and transfer space in order to maintain fluidity?

2. Would you consider the use of additional storage and transfer spaces for congestion mitigation, such as inland ports, feasible for your industry and geographic areas of operation?

3. Recognizing the distribution value chain involves multiple stakeholders, what other entities would most benefit from additional inland ports?

4. What roles do you envision the private and public sector, including the Federal government, offering to create the most effective strategy to implement congestion mitigation through greater development and utilization of inland ports?

Comments are due October 26, 2022. For detailed comment submission instructions, see the Federal Register notice.

The U.S. Federal Maritime Commission (FMC) announced the hiring of Linda S. Harris Crovella to serve as an Administrative Law Judge in the FMC’s Office of Administrative Law Judges. Judge Crovella joins the Commission after serving as an Administrative Law Judge with the Social Security Administration in Richmond, VA and Buffalo, NY for the past six years. Prior to joining the Social Security Administration, she worked at the National Labor Relations Board as a Field Attorney, investigating and litigating unfair labor practice charges.

“The caseload of our Office of the Administrative Law Judges has sharply increased over the past two years resulting from more parties seeking relief to shipping disputes by using the formal complaints process. Expanding the capabilities and resources of this critical function supports my priority that the Commission emphasize its enforcement work. Judge Crovella possesses excellent experience and credentials and I am confident she will be a valuable addition to the agency. I am pleased to welcome her to the Commission,” said Chairman Maffei in the FMC’s hiring announcement issued on September 26, 2022.

Judge Crovella received her J.D. from State University of New York at Buffalo School of Law in 1987 and her B.S. from Cornell University in 1982.  She is a member of the New York State Bar. She will serve with Chief Administrative Law Judge Erin M. Wirth. Judge Wirth also served as an ALJ at the Social Security Administration prior to joining the FMC’s Office of Administrative Law Judges in 2010.

The U.S. Federal Maritime Commission (FMC) received two new formal complaints in September 2022 alleging violations of the U.S. Shipping Act and FMC regulations. 

Unreasonable Cargo Practices, FMC Docket No. 22-23:  Maritime Transport Logistics, Inc. (MTL), a New-York-based non-vessel-operating common carrier, filed a formal complaint against CMA-CGM (America), LLC (CMA), alleging that CMA violated the U.S. Shipping Act by failing to establish, observe, and enforce just and reasonable practices related to the receiving, handling, storing, and delivering of cargo. MTL further alleges that CMA violated the U.S. Shipping Act by failing to provide accurate and timely accounting of demurrage and storage charges, and by failing to include accurate descriptions of such charges in MTL’s service contract. Specifically, MTL alleges that CMA failed to take action to reroute five containers after MTL instructed CMA to halt delivery of containers to Ukraine and deliver them to the Port of Bremerhaven. MTL alleges that CMA is still holding these five containers and that failure to reroute these containers has resulted in $600,000 in actual and consequential damages. MTL requests that the Commission award damages and any other relief that the Commission deems proper. 

This is not MTL’s first complaint against CMA for unreasonable cargo practices. MTL filed a similar complaint against CMA in 2018. The claim was settled confidentially in 2020.

Unlawful Detention & Demurrage Fees, FMC Docket No. 22-26:  Philip Reinisch Company LLC (PRC), an Indiana-based importer, filed a formal complaint against Flexport International LLC, a San Francisco-based non-vessel-operating common carrier, alleging that Flexport violated the U.S. Shipping Act by failing to issue detention and demurrage invoices in compliance with new invoicing requirements established by the Ocean Shipping Reform Act of 2022 (OSRA-2022). Specifically, PRC alleges that Flexport issued numerous invoices for detention and demurrage starting on June 27, 2022 that did not include all details required by OSRA-2022. PRC further alleges that Flexport refused to provide PRC with complete details for the invoices and held PRC’s containers until the faulty invoices were paid.

PRC requests the Commission find Flexport in violation of the U.S. Shipping Act, order Flexport to refund PRC $56,117.19 plus interest and nullify $49,643.32 in outstanding detention and demurrage charges. PRC further requests the Commission award PRC damages for wrongful withholding of containers and injuries sustained to its business interests along with reasonable attorneys’ fees and costs, and any other relief that the Commission deems proper.

This is the first formal complaint filed with the Commission in connection with the new detention and demurrage invoicing requirements established under OSRA-2022 which went into effect on June 16, 2022.

For more details visit FMC’s online reading room. The FMC’s reading room provides access to FMC dockets, related documents, notices, and orders.

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

NOTE 1:  COSCO GRIs apply on all cargo moving under service contracts only.  The GRIs previously effective 01Sep2022 were postponed to effective 15Sep2022. They were subsequently postponed to effective 01Oct2022 and now are postponed to effective 15Oct2022.

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.

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

NOTE 1:  COSCO GRIs apply on all cargo moving under service contracts only. The GRIs previously effective 15Sep2022 were postponed to effective 01Oct2022. They were subsequently postponed to effective 15Oct2022 and now are postponed to effective 01Nov2022.

 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.