In the spring, when the FMC unanimously voted to finalize the interpretive rule concerning detention and demurrage charges, I stated in the record that we had made a first step but should consider further action if that interpretive rule was not sufficient. Yesterday, the Commission voted unanimously to initiate an investigation specifically into practices at the Nation’s three largest ports that seem to be contributing to congestion and unfairness. The new investigation grows out of Commissioner Dye’s Fact Finding Investigation on the impacts of COVID-19 on the supply chain and will address whether carriers are implementing practices or regulations that may violate 46 U.S.C. § 41102(c).
The pandemic conditions combined with the incredible import volumes partly resulting from the pandemic have created a crisis in the supply chain. I perceive that some carriers have taken positive steps to work with other groups in the supply chain to develop more fair and efficient practices as the crisis evolved over the past weeks. However, there are reports that some carriers are threatening high charges for failure to return empty containers on time, even in cases where congestion has made it difficult or impossible to do so. I fear there are too many in the industry who may be ignoring the principles set out in the interpretive rule when it comes to levying detention and demurrage charges. Therefore, I strongly support this expansion of the Fact Finding 29 investigation.
While this was the most expeditious way to begin, we may find that the parameters of Fact Finding 29 are insufficient to address the root of the problems. Depending on what Commissioner Dye finds, the Commission must move towards addressing what I see as the most compelling problems facing the industry:
First, there are increasing reports that the delays and congestion problems are being exacerbated by carrier demands that a container, once emptied, be returned to a different location from that where it was obtained. It is imperative that we determine whether these container return policies are being implemented in a reasonable manner.
Second, the apparent lack of availability of containers needed to export chemical and agricultural products is concerning. One of the purposes of the Shipping Act is for the FMC to “promote the growth and development of United States exports” and so I believe we have a responsibility to ensure that carriers do not limit the containers for U.S. exports in a way that is inconsistent with the Shipping Act and other U.S. laws.
Daniel B. Maffei is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not represent the position of the Commission.