Export Service is New Added Focus of FMC Ocean Carrier Audit Program

The Federal Maritime Commission’s Vessel-Operating Common Carrier (VOCC) Audit Program is expanding its scope to also evaluate how shipping lines are serving U.S. export shippers.

The added emphasis on carrier export performance and service was directed by FMC Chairman Daniel B. Maffei and will involve meetings with 11 carriers to discuss their export programs.

Ocean carriers are now being asked to share information about the export services they offer American shippers. Responses will provide better insight into not only market trends and performance, but where opportunities exist for individual lines to improve or increase access to service offerings.

“American exporters deserve access to ocean transportation to sell to international markets every bit as much as overseas sellers get access to U.S. markets. The FMC’s expanded ocean carrier Audit Program will provide better visibility into which ocean carriers work well with U.S. exporters, and more importantly, which ocean carriers can and should do more to support exporters.  If the shipping companies continue the cooperative attitude they have by and large shown the Audit Team to date, I am confident we can make progress on some of the issues that have frustrated exporters.  That said, the Commission is committed to an ocean transportation system that serves exporters as well as importers and I will not rule out any action within the bounds of the law that helps us achieve that goal,” said Chairman Maffei.

The VOCC Audit Program was established in July 2021 by Chairman Maffei and aligns with recommendations made by Commissioner Rebecca F. Dye as part of her work on Fact Finding 29.  The initial mandate of the VOCC Audit Program was to assess ocean carrier compliance with the FMC’s rule on demurrage and detention and to identify and gather additional information beneficial to the continuous monitoring the Commission conducts of the marketplace for ocean cargo services.  Since its launch, the VOCC Audit Program has collected information on detention and demurrage policies from the nine largest ocean carriers by market share, provided briefings to ocean carriers on the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices, communicated best practices with ocean carriers, and continues to receive quarterly data on detention and demurrage metrics.

Lucille Marvin, the Commission’s Managing Director, continues her leadership of both the VOCC Audit Program and the VOCC Audit Team.

Today’s announcement is part of an ongoing effort by Chairman Maffei to use the Commission’s authorities whenever possible to assist exporters.  The Chairman has already assigned an advocate to the Office of Consumer Affairs and Dispute Resolution Services (CADRS) to assist export shippers.  Further, he has directed the Bureau of Enforcement (BoE) and CADRS to prioritize any cases involving exporters.  Also this week, BoE is initiating an examination of the conduct of five independent container ship lines in terms of the service those companies offer American exporters.

The shipping companies being questioned by BoE do not traditionally operate in U.S. trade lanes but entered the marketplace in response to historically high rates shippers are paying to import cargo to the United States.

“All ocean carriers calling the United States have an equal obligation to conduct themselves in accordance with the law.  New entrants to the market—including the so-called pop-up carriers—have all the same responsibilities as companies that have served the U.S. trades for decades. We are especially interested in how the identified companies plan to serve the U.S. export market and how those business models comply with requirements under statute,” said Chairman Maffei.

The companies in question will provide specific information related to vessel calls they have made to the United States since June 2021, including the number of loaded and empty containers carried on a ship’s return journey to Asia.  BoE will assess responses to determine if further actions are warranted.