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Refusing US export cargo may violate Shipping Act, FMC warns

FEDERAL Maritime Commission commissioners Carl Bentzel and Daniel Maffei sent a letter to the World Shipping Council expressing concern that US exporters are having their cargo refused by major ocean carriers - a practice that could be a violation of the Shipping Act, reports Washington, DC's Supply Chain Dive

23 December 2020 - 19:00
FEDERAL Maritime Commission commissioners Carl Bentzel and Daniel Maffei sent a letter to the World Shipping Council expressing concern that US exporters are having their cargo refused by major ocean carriers - a practice that could be a violation of the Shipping Act, reports Washington, DC's Supply Chain Dive.

The letter outlines the legal requirements that carriers have in the US and notes that companies cannot discriminate against shippers or 'unreasonably refuse to deal or negotiate.'



Said Mr Bentzel: 'The World Shipping Council itself, per se, is not authorised to suggest anything. They're an association. But we thought that they would be willing to circulate our concerns to all of their members.'



US agricultural exporters have been vocal about export issues with ocean carriers for weeks. The export market out of Asia has been especially strong recently as US retailers import and restock, which has led rates for cargo departing China to soar while rates for cargo out of the US have not.



Ocean carriers have prioritised the movement of empty containers to send them to Asian exporters rather than US exporters. These issues are leading to 'a lot of complaints' for the FMC beginning a couple of months ago, Mr Bentzel said.



'We were getting repeated meetings where people were talking about the frustrations with container access,' he said. 'We started to hear that the results of this lack of equipment was that the carriers were increasingly moving to try to get containers, in particular, back and positioned in Asia.'



Mr Bentzel said he's seen communications from carriers telling exporters they have a policy not to pick up any more export cargo.



Mr Maffei said other complaints show carriers providing one to five per cent of the containers originally agreed upon in contracts.



'There are certainly some [shippers] who would be willing to pay more just in this particular instance, but they're not even being asked - their containers are being cut without any negotiation,' Mr Maffei said.



'I believe they all potentially could be violations of the Shipping Act,' he said. 'Again, if they're actually occurring.'



Shippers can bring claims against carriers through the FMC, where Administrative Law Judges will hear the case and the agency can issue fines or award reparations. The agency's Bureau of Enforcement can take similar action against carriers.



The letter from the two Democratic Commissioners, comes as the agency is stepping up its scrutiny of the carriers. FMC Commissioner Rebecca Dye met with CEOs of six ocean carriers last week to talk about container issues.



The FMC has expanded the scope of Fact Finding 29, led by Ms Dye, to investigate the container-related practices of carriers operating in alliances that call the ports of Long Beach and Los Angeles, or the Port of New York and New Jersey.


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