Washington, D.C. – The U.S. Federal Maritime Commission (FMC) has published its final rule outlining the criteria for lodging complaints regarding carriers’ refusal to provide cargo space when available. This rule aims to clarify the conditions under which the FMC will investigate claims of “unreasonable” refusal of cargo space to U.S. exporters or refusal to negotiate vessel space accommodations.
The new regulation follows the enactment of the Ocean Shipping Reform Act in June 2022, which was a response to numerous complaints against carriers during the pandemic. The Act mandated a definition of “unreasonable” refusal to deal or negotiate, noting that not all refusals violate the Act.
The rule will apply to complaints from private parties and FMC’s enforcement cases. Despite opposition from carriers and their representatives during the proposal stage, the FMC maintained its initial approach. Notably, the FMC retained a provision allowing it to consider the quoted rate when evaluating if a carrier made a good-faith effort to negotiate. Carriers contended this provision overstepped the FMC’s authority as a non-rate-regulating body.
Additionally, the FMC will require carriers to file an annual export policy, including service and market descriptions, pricing strategies, and container equipment. Representatives argued this could disadvantage carriers competitively. The new rule is set to take effect on September 23.
Evergreen Wins Appeal Against FMC
The U.S. Court of Appeals in Washington, D.C., recently ruled in favor of Taiwanese carrier Evergreen Marine in a case concerning detention and demurrage fees (D&D). The case involved USD 510 in detention charges levied on trucking company TCW while the relevant port was closed. The FMC had initially ruled that Evergreen should waive the charges.
However, the Appeals Court overturned the FMC’s decision, criticizing the regulator’s stance as “illogical” and noting a “myopic focus” on the incentive principle in the case.
Sources: Alphaliner, FMC
