Chairman Michael A. Khouri Statement RE: Fact Finding 29 Supplemental Order

FMC Chairman Michael A. Khouri made the following comments concerning the expanded investigation scope and authority of Fact Finding 29 initiated in March 2020:

As referenced in this Supplemental Order, the primary purpose of the initial Fact Finding 29 was to identify commercial and operational solutions to cargo delivery system challenges related to then recent global supply chain disruptions and dislocations. Stakeholder discussions revealed several problem areas in and around major ports, including the Ports of Los Angeles, Long Beach, and New York/New Jersey.

The problems identified include return of empty containers, availability of empty containers for U.S. export cargos, and demurrage and detention charges in and around the marine terminals. I believe all Commissioners have heard from constituents concerning these problem issues as well as related subjects.

One example of such related problems is assertions that vessel operators have required dray truck companies to pay detention levies in situations where the recent interpretative rule, now finalized in 46 C.F.R. section 545.5, might be applicable. Further, there have been allegations that vessel operator personnel have told dray truck operators and ocean transportation intermediaries (OTI) that they must pay such ancillary charges even in commercial situations where such party is not responsible for payment of such charges. Further, there have been allegations that the regulated entity has told the dray truck operator or the OTI that if they do not pay, they will be put on a “blacklist” and not receive any further business.

The above allegations need to be systematically investigated and analyzed within the context of Shipping Act provisions concerning practices and regulations in 46 U.S.C. section 41102(c). With full recognition that allegations are not evidence or proof, the Commission has a clear and compelling responsibility to investigate the assertions and bring sunlight to any potentially questionable practices. From that investigation foundation, the full Commission can then determine appropriate responses and actions.

The current Fact Finding 29 structure is best suited to move forward with investigation of these matters and I encourage all ocean supply chain stakeholders – shippers and cargo interests, OTIs, marine terminal operators, vessel owner common carriers, port dray truck operators, and others – to participate in the investigation and to cooperate with Commissioner Rebecca Dye’s efforts to bring forward verified evidence and constructive solutions to these disruptions and bottlenecks at these ports and other points along our Nation’s ocean supply chain.

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