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As Congestion and Other Problems Worsen, FMC Offers Services to Resolve Shipping Disputes

Thursday, July 09, 2015
Sandler, Travis & Rosenberg Trade Report

With most of the volume of international trade carried by oceangoing vessels, the rising number of disputes among shippers, carriers and others that have resulted from developments such as worsening port congestion, labor unrest and carrier consolidation could have a significant economic impact. The Federal Maritime Commission’s Office of Consumer Affairs and Dispute Resolution Services is seeking to increase awareness of the roles it can play to help resolve those disputes.

CADRS and its use to address shippers’ claims against ocean transportation intermediaries will be among the topics of discussion in an Aug. 27 webinar to be conducted by Sandler, Travis & Rosenberg. More information on this webinar will soon be available on ST&R’s webinar page, which can be accessed here. In addition, ST&R attorneys can assist companies in determining whether use of CADRS would be appropriate and beneficial in certain circumstances.

The FMC states that CADRS offers free and confidential ombuds and rapid response, mediation, facilitation and arbitration services to help prevent and resolve disputes between shippers, freight forwarders, non-vessel-operating common carriers, steamship lines, marine terminals, truckers, customs brokers and other members of the shipping public. CADRS accepts matters at any stage of a dispute, which allows parties to settle existing litigation or avoid litigation entirely. CADRS also provides “one-stop shopping,” allowing parties to address contractual, Shipping Act, regulatory, general commercial and other concerns through a single process.

According to the FMC, for concerns and disputes such as obtaining space onboard a vessel, accruing demurrage and detention/per diem, rate/surcharge or lien assessments, CADRS employs the use of ombuds or rapid response teams to provide expedient telephonic mediation or other techniques to help parties seek resolution. As part of the rapid response program, steamship lines have designated contacts that will respond to CADRS within 24 hours of a reported concern.

Where parties seek to address large-scale industry trends such as best practices or demurrage, CADRS offers facilitation services to help organize discussions. Facilitation may be used to formulate strategy for large-scale industry concerns but can also be used to prevent disputes by fostering communication and good will between participants.

The FMC notes that the outcomes in these proceedings are dependent on the mutual agreement of the parties. Party agreements may be reduced to enforceable settlement agreements, but if no agreement is reached the parties may terminate CADRS services and resort to traditional dispute resolution options such as arbitration or litigation. CADRS also offers binding arbitration, which can be obtained via written agreement.

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