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US FMC releases its investigation results into the container carrier supply chain

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NEW YORK : Commissioner of the Federal Maritime Commission (FMC), a US Government Agency, Rebecca F. Dye has released her Final Report for Fact Finding 29, “The Effects of COVID-19 on the U.S. International Ocean Transportation Supply Chain”.

During Fact Finding 29, importers and exporters highlighted two recurring pandemic-related concerns. The first is the high cost of shipping cargo and the second is the excessive charges for demurrage and detention.

Commissioner Dye said that “the historically high freight rates experienced recently by US exporters and importers have been devastating to many, but I want to emphasise that the Commission has done its job during the Covid-19 pandemic to enforce our competition authority.”

Dye went on to explain, “Our markets are competitive and the high ocean freight rates have been determined by unprecedented consumer demand, primarily in the United States, that overwhelmed the supply of vessel capacity. Congestion further constrained available capacity.”

She also expressed her satisfaction with the actions of FMC during the Covid-19 pandemic. “The Commission has moved forward on enforcement of the Interpretive Rule on Detention and Demurrage and ensuring compliance by carriers with the ‘incentive principle’ embodied in the Rule,” she pointed out.

Concluding, commissioner Dye stressed that “I look forward to implementation by the Commission of my Final Recommendations, which I believe will provide badly needed clarity and consistency in certain port and supply chain operations, especially involving ‘earliest return dates’ and ’empty container return’.”

The following is the second set of recommendations arising out of Fact Finding 29 and includes:

  1. A new Commission “International Ocean Shipping Supply Chain Program”;
  2. A rulemaking to provide coherence and clarity on Empty Container Return practices;
  3. A rulemaking to provide coherence and clarity on Earliest Return Date practices;
  4. Continued Commission support for the new FMC “Ocean Carrier Compliance Program” including a new requirement for ocean common carriers, seaports, and marine terminals to employ an FMC Compliance Officer;
  5. An FMC Outreach Initiative to provide more information to the shipping public about FMC competition enforcement, service contracts, forecasting, and shippers associations, among other topics;
  6. Enhanced cooperation with the federal agency most experienced in agricultural export promotion, the Department of Agriculture, concerning container availability and other issues;
  7. A Commission Investigation into practices relating to the numerous charges assessed by ocean common carriers and seaports and marine terminals through tariffs;
  8. A rulemaking to provide coherence and clarity on merchant haulage and carrier haulage;
  9. A new “National Seaport, Marine Terminal, and Ocean Carrier Advisory Committee” to work cooperatively with the Commission’s National Shipper Advisory Committee;
  10. A revival of the Export Rapid Response Team program as agreed by all ocean carrier alliance CEOs;
  11. An FMC Supply Chain Innovation Teams engagement to discuss blank sailing coordination and information availability; and
  12. A reinvigorated focus on the extreme supply chain equipment dislocations in Memphis railheads, other rail facilities, and other facilities around the country.
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