Testimony of Commissioner Dye before Congress: “Impacts of Shipping Container Shortages, Delays, and Increased Demand on the North American Supply Chain”

TESTIMONY OF

Commissioner Rebecca F. Dye

FEDERAL MARITIME COMMISSION

BEFORE THE
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION
UNITED STATES HOUSE OF REPRESENTATIVES

JUNE 15, 2021

Thank you, Chairman Carbajal, Ranking Member Gibbs, Chairman DeFazio, Ranking Member Graves, and Members of the Subcommittee.

I’m pleased to be with you today, to discuss my Fact Finding 29 Investigation, dealing with the effects of COVID-19 on the U.S. international ocean freight delivery system.

Thank you for your support of the Commission’s National Shipper Advisory Committee, enacted as part of the Elijah Cummings Coast Guard Authorization Act.  We’re currently soliciting exporters and importers for the Committee.

I have included a summary describing my Fact Finding 29 Investigation to date, as part of my testimony today.

The Fact Finding 29 Investigation is my fourth major Commission investigation and I appreciate the strong support I have received from Chairman Maffei.

My focus in Fact Finding 29 is how to strengthen the performance of the overall U.S. international freight delivery system.

This requires closer coordination and visibility among exporters, importers, truckers, ocean carriers, marine terminals and ports, longshore labor, railroads, chassis providers, and shipping intermediaries.

There are three major obstacles to resolving major port congestion:

• The problems we are experiencing are not new. They occur in every cargo “surge” or “peak season;”
• No supply chain actor alone, not ocean carriers or ports, can develop a solution without a coordinated approach; and
• The lack of mutual commitment between parties to freight delivery agreements keeps parties from achieving enforceable agreements.

The Commission Order on Fact Finding 29 authorizes me to form FMC Supply Chain Innovation Teams to develop commercial solutions to port congestion and related supply chain challenges.

Fact Finding 29 used 9 small Teams to identify major supply chain bottlenecks.

These small teams are composed of industry leaders with the knowledge and the experience and, most important, the willingness to work to change the system. I hope to convene these teams in person in the near future.

I’d like to emphasize one final thing about the current state of Fact Finding 29 and the investigations ongoing under the Supplemental Order the Commission issued to me last November.

Our Bureau of Enforcement staff are actively investigating cases of potential unreasonable demurrage and detention charges involving the most common situation affecting exporters, earliest return date.

More investigations will follow, perhaps involving other potentially unreasonable practices.

No further regulatory or statutory action is necessary for us to enforce the Commission’s Demurrage and Detention Rule interpretation section 41102(c) of title 46, which already requires common carriers, marine terminal operators, and ocean transportation intermediaries to establish, observe and enforce just and reasonable regulations and practices.

We do require, like any other law enforcement agency, facts to investigate a potential violation.

Our Bureau of Enforcement needs evidence, such as a bill of lading number, and a brief description of facts surrounding a potential violation to begin an investigation.

Finally, Mr. Chairman, our U.S. international ocean freight delivery system is unprepared to deal with growing volumes of cargo flowing through our major ports.

If we don’t change, we can’t grow.

In 2017, our FMC Supply Chain Innovation Teams recommended a National Port Information System to provide end-to-end visibility in our international ocean freight delivery system.

Now is the time to move forward with this recommendation, harmonize our supply chain, leap over existing problems, and boost American competitiveness and our economy.

Thank you, Mr. Chairman.  I will be glad to discuss my preliminary recommendations from my investigation and answer your questions.