Acting Chairman Michael A. Khouri’s Statement to the Cotton Club

Prepared Remarks to the Cotton Club Acting Chairman Michael A. Khouri Thursday, March 23, 2017

As the Acting Chairman, I am pleased to join with my fellow Commissioners in welcoming our guests from the Cotton Club to the Federal Maritime Commission today.

This is the 100th year of operation under our Shipping Act. The U.S. Shipping Act was enacted in recognition that competition in the international liner trade is different. Special consideration is warranted due to the important role of the liner trade in global commerce and the potential for competing – even conflicting – regulatory regimes of our international trading partners. The Federal Maritime Commission stands forward to safeguard America’s maritime supply chain and we do this in a number of areas.

As you know, we review and monitor joint competitor agreements between the various ocean carriers that serve the U.S. trades, some 165 carriers. We also review cooperation agreements among marine terminal operators. In total, that’s some 478 monitored agreements. The parties submit some monthly and then quarterly reports on many aspects of their respective operations for review by the Commission’s trade analysis group of economists and transportation specialists.

On the NVO and freight forwarder front – our Bureau of Certification and Licensing does initial license review including personnel background and financial checks, and then ongoing tariff and financial bond monitoring on some 6,200 NVOs and freight forwarders operating in the U.S. The Commission’s Bureau of Enforcement conducts hundreds of audits on ocean transportation intermediaries each year. They investigate and enforce other Shipping Act provisions aimed primarily toward carrier, NVO, freight forwarder or marine terminal conduct that may be discriminatory, deceptive or unfair. We review financial data and financial bonds for passenger vessels to protect US passengers from fraud and abusive practices. The Consumer Affairs and Dispute Resolution office handles hundreds of inquiries each year concerning a wide range of complaints from delayed or lost cargo, to abusive rate charges, to disputes about equipment and complaints filed against cruise lines. Last on the domestic front, a current initiative is Commissioner Dye’s Supply Chain Innovation Teams – which she may want to speak to.

On the international front, we participate in bilateral maritime discussions and treaty agreements.

Next month, I will be in China for round three of joint discussions between the EU, China and the United States on the state of the ocean container shipping industry and our regulatory role in supervising those issues.

My personal view point is embedded in the opening Declaration of Policy statement in the Shipping Act,

• A nondiscriminatory regulatory process,
• With a minimum of government intervention and regulatory costs,
• And last yet first – placing greater reliance on a free, open and competitive marketplace.

Thank you.

Michael A. Khouri is the Acting Chairman of the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.

For an explanation of the Cotton Club and news about the meeting please see the News Release.