U.S. Federal Maritime Commission (FMC) Holds Meeting - Supply Chain Issues, Detention & Demurrage Charges & Fact Finding 29 Interim Recommendations Reviewed

July 28, 2021

In the open session of this morning's FMC meeting, Commissioner Rebecca Dye provided an update and an oral overview of Interim Recommendations for Fact Finding 29, tasked with reviewing and investigating international ocean transportation challenges. In addition to establishing container depots to alleviate some of the concerns raised and a continued review of detention and demurrage fee applications, she highlighted top-line interim recommendations, which include:

  • Clarification of the industry shipping process
  • Utilization of the Office of Consumer Affairs & Dispute Resolution Services (CADRS) to address a range of shipping challenges
  • Broadening of the anti-retaliation section of The Shipping Act of 1984
  • A process to authorize the Commission to authorize reparations for demurrage and detention fees, should they be warranted

Fact Finding 29's interim recommendations also include the issuance of an FMC policy statement covering:

  • Attorney fees and responsible parti(es) for payment
  • Revised complaint process for all stakeholder parties
  • Opportunities for trade associations to bring complaints directly to the Commission

The FMC will issue the full, formal interim recommendations later today. IAM will review them in-depth once they are posted and provide a link to members as well.

 

Commissioner Carl Bentzel provided a brief update on his research into equipment shortages, both reefer containers as well as chassis availability. He cited challenges in sourcing containers from Chinese state-owned enterprises, with production dropping 20% in recent months. This can likely be attributed to both COVID-19 protocols/production halts, and Chinese government market control policies (which are unclear), and may not be solely attributed to traditional supply and demand production levels, although recent COVID-19 shipping practices have brought additional strain to the availability.

He noted that while the chassis production market is somewhat less outside of the Chinese owned enterprises, it's estimated that these Chinese-owned companies still produce as many as 85% of all chassis used at the U.S. ports. A formal report on Commissioner Bentzel's findings will be made available in the coming weeks.