Billing and Licensing
The Federal Maritime Commission recently reviewed the operation of the FMC Audit Program, which was established in July 2021 at the height of pandemic-related supply chain congestion to address concerns with ocean carrier detention and demurrage charges and was expanded in 2023 to include marine terminal operators. According to the FMC, a key feature of this program is that participating carriers and MTOs regularly provide information on market and operational trends of particular interest to the agency, including demurrage and detention billing trends, lockouts (denials of access to pick up containers based on non-payment of such fees), and bookings cancelled by shippers or carriers.
The program thus allows both the FMC and regulated entities to raise and address operational, business, or compliance issues informally and before they become problematic or trigger an enforcement action. The FMC notes that the program has also been successful in promoting best practices in some key areas, helping to create consistency of experience for shippers across ocean carriers.
The FMC also highlighted its licensing role for ocean freight forwarders and non-vessel-operating common carriers, collectively referred to as ocean transportation intermediaries. U.S.-based OTIs must be licensed and bonded. There are now 5,119 such OTIs, a number that has remained fairly consistent in recent years, and the vast majority are located in California, Florida, New York, New Jersey, and Texas. Foreign-based NVOCCs can choose to be licensed or registered but both must maintain a bond. The FMC said it has seen tremendous growth over the past three fiscal years in the number of foreign registered NVOCCs (most of which are in China) but that very few foreign NVOCCs choose to be licensed.
Major Carriers Propose Cooperation
The Federal Maritime Commission is accepting comments through June 18 on a new vessel-sharing agreement filed by major carriers Maersk and Hapag Lloyd. According to the FMC, the proposed Gemini Cooperation Agreement would allow the two companies to globally coordinate their vessel operations under a structure whereby major ports of call would be served directly (the mainline network) and other ports would be served by a shuttle service (the shuttle network). If the FMC takes no action on this agreement it would become effective July 15 and activities conducted thereunder would not be subject to federal antitrust laws.
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