Background

Steps Identified to Address Los Angeles Port Challenges

The Federal Maritime Commission reports that Commissioner Rebecca Dye has identified the following four approaches to address critical operational challenges at the ports of Los Angeles and Long Beach.

Empty container returns. Truckers should be directed to return empty containers to the terminal where they were picked up, allowing them to make dual moves and reduce the number of chassis required. With limited exceptions, suggestions included (1) terminals refraining from cutoffs of empty returns mid-shift, (2) terminals adopting a goal of seven days advance notice, but no less than 24 hours, for empty cutoffs, and (3) terminals allowing appointment-free returns during low-use periods (such as night gates). Some terminals have already instituted these or similar practices.

Gate closure notification. Notice of terminal gate closures (e.g., because expected cargo volumes do not financially justify maintaining full gate hours) should be given no less than three days, and preferably seven days, before gate closing. In addition, BCOs and drayage companies could improve the situation by letting terminals know when they no longer need appointments.

Blank sailings. Notice of blank sailings (when vessels are moved empty to keep supply matched to demand) should be not only given directly to beneficial cargo owners but also posted prominently on a carrier’s website at least seven days in advance. Notice of bypassed ports should be posted at least 72 hours in advance.

Export cargo. Changes to ship arrivals can affect export cargo’s earliest receiving date and cutoff date for loading the container, especially for inland-based rail users, so there should be a minimum of seven days’ notice of changed ERDs but more if possible. In addition, carriers’ and terminals’ information on the exporter’s cargo receiving timeline needs to be closely coordinated to prevent conflicts.

The FMC states that it plans to continue regional meetings to identify practical operational goals for other ports that can improve international supply chains. The ports of New York and New Jersey and New Orleans are next on the FMC’s schedule.

Essential Terms Requirement for Vessel Carriers Eliminated

In an effort to reduce the regulatory burden, the FMC is amending its regulations governing service contracts to eliminate the requirement that ocean carriers publish a concise statement of essential terms with each service contract. The FMC had proposed to replace this requirement with a requirement that carriers publish general service contract rules and notices as a separate part of the individual carrier’s automated tariff system, but the final rule makes this provision optional rather than mandatory.

Under the Shipping Act of 1984, ocean freight rates, surcharges, and accessorial charges had to be published in tariffs or agreed to via a service contract filed with the FMC, and carriers were required to make publicly available a statement of the essential terms of such contracts (including the line-haul rate) in tariff format. However, the Ocean Shipping Reform Act of 1998 eliminated the requirement that contract rates be published in the carrier’s public tariff, and since then the publication of essential terms has been limited to origin and destination port ranges, commodities, minimum volume or portion, and duration.

As a result, the FMC has concluded that the essential terms publication is no longer useful to shippers in contract negotiations with carriers, among carriers as a tool in potential pricing coordination, or to the Commission itself since it has the ability to access complete service contracts.

OTI License Applications

The FMC has provided notice that the following have filed applications (a) for OTI licenses as NVOCCs and/or ocean freight forwarders or (b) to amend an existing OTI license or the qualifying individual for a licensee.

- “K” Line Logistics (U.S.A.) Inc., Springfield Gardens, NY (QI change)

- Aldo Cargo Express Corp., Fort Lauderdale, FL (new OFF license)

- Andes Logistics USA LLC, Doral, FL (QI change)

- Cai Logistics Inc., San Francisco, CA (QI change)

- Distra Activesea USA LLC, The Woodlands, TX (name change to Southern Cross Shipping LLC)

- GF Logistics USA LLC, Miami, FL (QI change)

- Global Transhipping Inc., Miami, FL (new OFF license)

- Intermodal Exports Ltd., Valley Stream, NY (QI change)

- Ismatou Enterprise Inc., Birmingham, AL (new NVO and OFF license)

- JORI Logistics LLC, Houston, TX (new NVO and OFF license)

- Master Shipping & Logistic LLC, New Castle, DE (new NVO and OFF license)

- New York Forwarding Services Inc., Berkeley Heights, NJ (QI change)

- Seven Seas Trading Inc., North Miami, FL (new NVO license)

- SJ Trucking and Logistics LLC, Frederick, MD (new NVO license)

- Star Ventures Atlantic Logistic LLC, Lawrenceville, GA (new NVO and OFF license)

- TSL Shipping & Trading LLC, Houston, TX

- US Flying Eagle Group Corporation, City of Industry, CA (new OFF license)

- West Tech Shipping LLC, Doral, FL (QI change)

- William B. Meyer Incorporated, Stratford, CT (QI change)

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