Background

The Federal Maritime Commission has issued a supplemental proposed rule that would implement a statutory change prohibiting ocean common carriers from unreasonably refusing to deal or negotiate with respect to vessel space accommodations for imports and exports. Comments on this rule are due no later than July 31.

The supplemental rule seeks to address issues raised in comments to the proposed rule, which was issued in September 2022 and would (1) shift the burden of proving that a refusal to deal is reasonable from shippers to carriers (though the ultimate burden of persuasion would remain with the complainant), (2) create a rebuttable presumption of unreasonableness when a carrier categorically excludes U.S. exports from its backhaul trips from the U.S., and (3) set forth a non-exhaustive list of factors the FMC would consider in evaluating complaints.

According to the FMC, key changes in the supplemental rule include the following.

- establishing the elements for a refusal of cargo space accommodations

- revising the definition of “transportation factors” to focus on vessel operation considerations

- revising the definition of “unreasonable” to include a general definition and a non-exhaustive list of unreasonable conduct scenarios

- clarifying that vessel space services are already included in the definition of “vessel space accommodations”

- removing the voluntary export strategy documentation language

- adding a definition for “cargo space accommodations”

- defining “documented export policy” and requiring carriers to submit such a policy to the FMC once each year

- removing the voluntary certification provision

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 recent shipping reform measures. 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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