Commission Meets to Hear Briefings on Supply Chain Teams, Shipping Forum, Procedural Changes and Discuss Petition

Contact: John K. DeCrosta (202) 523-5911

The Federal Maritime Commission met this morning where it received briefings in open session on changes to the agreement review process, progress with the Supply Chain Innovation Teams, and the recently concluded London International Shipping Week, and in closed session, it received a briefing on Petition Number P4-16, the petition of the Coalition for Fair Port Practices for rulemaking.

Commissioner Rebecca Dye provided a briefing on the Supply Chain Innovation Teams and their “Phase II” work progress. The current three teams are focused on export issues and have been making substantial progress since being launched in July of this year. Commissioner Dye has set a goal of publishing a report on this effort as soon as this fall. Commissioner Dye noted that her research and interviews have revealed the common theme that technology does not come first when trying to improve systems or processes. The proper sequence is to first define the needs and purpose of a project and then choose the technology that accomplishes the goals, which is exactly the scope of work the Supply Chain Innovation Teams have been engaged in. Finally, Commissioner Dye said that she hopes to obtain authorization for a concept design for a national seaport information portal.

Acting Chairman Michael Khouri and General Counsel Tyler Wood briefed the Commissioners on the multiple proceedings they participated in during London International Shipping Week, including meetings with International Maritime Organization Secretary General Lim Ki-Tack and his staff; the Right Honorable John Hayes, Minister of State, United Kingdom Department for Transport; Magda Kopczynska, the European Commission Director for General Mobility and Transport; and a site inspection of the ABP Southampton port facility.

The Commission then received a Bureau of Trade Analysis presentation outlining how the agreement review process has changed in response to industry trends. Under the law, the Commission has 45 days to consider a filed agreement and either reject it or allow it to go into effect. In response to receiving agreements of increased complexity or of a nature not previously seen by the Commission, all set against a backdrop of fewer ocean carriers operating in fewer, larger alliances, the Commission now uses a review process that allows for more input from staff and Commissioners earlier in the process, continuing to achieve the most thorough and timely analysis possible in that 45 day review period. The presentation also highlighted another important part of the review process, the negotiations that take place between the Commission and filing parties to eliminate any problematic language posing potential threats to a competitive marketplace. This updated review process is another example of how the Commission adjusts its practices and procedures in response to developments in the shipping industry in order to meet its mission of fostering a fair, efficient and reliable international ocean transportation system.

The Commission then moved into closed session to receive a briefing on the numerous public written comments that have been submitted in response to the Petition of the Coalition for Fair Port Practices Rulemaking. Petition Number P4-16 concerns demurrage, detention and per diem business practices and charges being assessed at various ports around the country by marine terminal operators (MTO) and vessel ocean common carriers (VOCCs). Following discussions on the various causes of such assessments and the wide variety of MTO and VOCC business practices disclosed by the comments, the Commission voted to hold public hearings on the petition. Witnesses to be invited to testify at the hearing will include: legal representatives of the petitioners, trade and shipper associations representing various interests, individual importers, exporters, customs brokers, freight forwarders, logistics companies, trucking and drayage companies, VOCCs, port authorities, and MTOs.

The stated purpose of the public hearings is to provide the Commissioners an opportunity to question and discuss with the representative stakeholders the multiple causes of port congestion, the divergent array of demurrage, detention and per diem assessment practices by different MTOs and VOCCs all in relation to the Petition P4-16 request for a new Commission issued rule that would prescribe allowable business practices in the assessment of such charges. Hearing testimony will assist the Commission as it considers options to accept, modify or reject the proposed rule set forth in Petition P4-16. Non-rulemaking options may also be considered. The hearings will be held at the FMC Headquarters in Washington D.C. The Commission will publish details on schedule and invited panel participants as soon as all arrangements are finalized.

The Federal Maritime Commission is responsible for regulating the Nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The Commission’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.