Background

A Federal Maritime Commission commissioner has recommended that the FMC take a number of additional steps to address supply chain breakdowns in the international freight delivery system related to the COVID-19 pandemic. The FMC has already taken measures such as launching a new audit program to analyze carrier compliance with FMC rules on detention and demurrage charges and announcing plans for a new audit team to focus on other areas.

The FMC notes that despite criticism of carrier and terminal practices in recent months, few private parties have filed complaints seeking reparations, possibly due to concerns about retaliation as well as the costs of litigation. There has also been confusion about FMC and industry processes for addressing concerns and challenges getting companies to participate in FMC investigatory and enforcement efforts.

The commissioner therefore recommends that the FMC push Congress to make a number of amendments to U.S. shipping law. These could include (1) expanding the prohibition on retaliation to all regulated entities, not just shippers and carriers, (2) authorizing double reparations for unlawful detention or demurrage charges, and (3) providing refunds, restitution, or similar remedies in addition to civil penalties in enforcement proceedings.

The commissioner also recommended that the FMC take various measures itself, including (1) issuing policy statements on retaliation and who may file complaints, (2) seeking industry views on whether carriers and marine terminal operators should have to include minimum information on or with demurrage and detention billings and adhere to certain practices regarding the timing of such billings, and (3) dedicating staff to export-related issues.

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