The Federal Maritime Commission recently provided the following update on actions being taken under the authority of the Ocean Shipping Reform Act of 2022.
Refusal to deal. In September 2022 the FMC proposed to amend its regulations to implement OSRA’s prohibition on ocean common carriers unreasonably refusing to deal or negotiate with respect to vessel space accommodations for imports and exports. The FMC now plans to issue a supplemental proposed rule to address the “multitude of substantive questions” raised in the nearly 30 comments submitted on the proposed rule.
Detention and demurrage. In October 2022 the FMC proposed to revise its regulations to bring more clarity, structure, and punctuality to the demurrage and detention billing practices of vessel-operating common carriers, non-vessel-operating common carriers, and marine terminal operators. FMC staff is currently reviewing the more than 180 public comments received, and the Commission gave no indication what the next step might be or when it might be taken.
Discriminatory conduct. OSRA prohibits carriers from retaliating against shippers for filing a complaint or patronizing another carrier, and in December 2021 the FMC issued a policy statement indicating that to establish a violation complainants alleging retaliation or other unfair or unjustly discriminatory conduct do not need to prove that the carrier’s conduct was designed to stifle competition. FMC staff is working on a draft proposed rule on this issue.
Emergency authority. After reviewing market conditions the FMC has determined that current circumstances do not warrant invoking temporary emergency authority under which it could require information sharing among supply chain participants. The FMC notes that both container volumes and freight rates on inbound trades have returned to essentially pre-pandemic levels, while the cost to ship exports remains slightly elevated.
Complaints. Since June 2022 the FMC has received more than 200 complaints disputing charges assessed by common carriers, including demurrage and detention fees, that may not comply with OSRA. More than 70 of these complaints met the requirements for being referred to investigators and an estimated $700,000 in charges have been refunded by carriers to date. FMC staff said the complaint process is proving successful at promoting informal settlements as well as waivers of demurrage and detention billings.
ST&R’s team of former FMC and DOJ litigation personnel, freight forwarders, and former administration and congressional staffers can help shippers understand, comply with, and take advantage of OSRA 22. For more information, please contact Jason Kenner (at (212) 549-0137 or via email), Andy Margolis (at (305) 894-1021 or via email), or Ned Steiner (at (202) 730-4970 or via email.)
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