Background

The Federal Maritime Commission is accepting comments through Oct. 10 on a proposed interpretation of the scope of section 10(d)(1) of the Shipping Act of 1984, which prohibits regulated entities from failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property. The FMC believes this interpretive rule would return its focus and priorities to the activities of maritime regulated entities that negatively affect the broader shipping public.

The proposal would clarify that the proper scope of this prohibition and the conduct covered by it is guided by the FMC’s interpretation and precedent articulated in several earlier cases, which state that for a practice or regulation to violate section 10(d)(1) it must be unjust or unreasonable and practiced by a regulated entity on a normal, customary, and continuous basis. As a result, contrary to the FMC’s reasoning in a line of recent cases, discrete or occasional actions by regulated entities not reflecting a practice or regulation would not constitute a violation of this section. The FMC states that traditional legal venues would continue to be available to parties injured by discrete instances of unreasonable or unjust conduct.

 

The FMC is seeking comments on this proposed change and how it would affect regulated entities, including ocean carriers, marine terminal operators, and ocean transportation intermediaries, as well as members of the shipping public, including cargo shippers and drayage truckers.

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