A month after the passage of the Ocean Shipping Reform Act, the U.S. Federal Maritime Commission has taken its first steps toward enacting provisions of the legislation. While the FMC has already been very vocal about the hotly contested detention and demurrage fees, the commission issued its first official guidance on the complaint process after the revisions to the Ocean Shipping Act increased shippers’ ability to lodge complaints.
Speaking at the passage of the legislation, FMC Chairman Daniel Maffei said, “OSRA will provide the FMC with enhanced authority to ensure industry players have the right incentives and that all stakeholders in the ocean freight transportation system can have a voice.” Maffei promised that the commission would move promptly to implement the steps necessary to bring shippers the benefits of the legislation. One of the key focuses of the bill was the frequent complaints from shippers over D&D fees, which they contend carriers have been unfairly implementing during the two-year surge in volumes.
The FMC released interim guidance for parties wishing to dispute charges assessed by common carriers that they believe may not comply with the Ocean Shipping Reform Act of 2022. Shippers were given instructions to file formal complaints or informal, small claims, reports to the FMC.
Confirming that the disputed charge was incurred on or after the enactment of the legislation last month, parties are instructed on the steps required to file a complaint. The process is relatively simple requiring identification of the common carrier and the specific alleged violations. Among the support materials they need to assemble and supply are invoices, Bill of Lading numbers, and evidence of whether the charge(s) have been paid.
“When the commission receives sufficient information, it will promptly initiate an investigation, which could ultimately result in a civil penalty and order for a refund of charges paid,” they write in the guidance. They however warned that investigations by the commission are for law enforcement purposes and do not constitute representation as an attorney for the complainant or a guarantee of refunds.
Trade groups, which had been active supporters lobbying for the passage of the Ocean Shipping Reform Act, hailed what seemed like a simple announcement from the FMC. They pointed out that this is the first step in launching the enforcement authorities provided in the legislation for the FMC.
The FMC had previously been active in providing guidance to carriers and seeking to create a stronger understanding about how and when D&D fees could be imposed. There have already been several complaints brought against carriers, and recently the FMC reached what was considered a landmark settlement with Hapag-Lloyd over its fee practices.
The expectation has been that there would be an increasing number of complaints filed with the FMC as the disputes mounted in 2021 and earlier this year over the fees. The reform of the Ocean Shipping Act gives shippers greater ability to bring complaints placing more of the burden of justifying the fees on the carriers.
Source: The Maritime Executive