Much of the news coming from the Federal Maritime Commission (FMC) is very specific and routinized as the provisions of Ocean Shipping Reform Act (OSRA 2022) are being vigorously enforced. Notably, in recent months- there has been a focus on the practices of carriers that have led to excessive demurrage and detention.
However, Commissioners at the FMC also take a very big picture view; recent initiatives led by Commissioner Carl W. Bentzel to better organise shipment-related data come to mind. This past week, another FMC Commissioner-Rebecca Dye, who famously wrote, in a June 2022 report, that there was “no collusion” by carriers in the supply chain disruptions of the previous year and a half, has offered a series of proposals that would reform certain practices related to container moves at the three largest US ports for box moves.
In her announcement, Commissioner Dye offered the backdrop for her proposals, saying: “Currently, these three practices are impediments to US international ocean supply chain performance. We must prepare now to handle the next surge in cargo demand by eliminating bottlenecks and ad hoc processes that undermine the efficiency of the US international ocean freight delivery system.”
The specific areas to be targeted, at the Ports of Los Angeles (10.7 teu handled in 2022), Long Beach (9.1 teu handled), and New York/ New Jersey (9.5 teu handled) relate to container returns, earliest return date, and container pickup - notice of availability. The proposals on container returns include provisions for boxes to be returned to the terminal of original pickup, facilitating the pickup of a new load, giving truckers the option to return empty containers to another location to facilitate double moves.
Proposals on container pickup including wording mandating that:
- Ocean carriers and marine terminals (MTOs) must coordinate information to provide shippers with an electronic notice that a container is available for pickup;
- Free time does not start until a container is accessible and available for pickup;
- Free time and clocks stop if a container becomes non accessible and unavailable for pickup; and
- Availability includes the physical availability of the container to be picked up within a reasonable time period by the shipper or trucker.
The FMC is now soliciting responses to the proposals, in advance of the FMC convening its “Supply Chain Innovation Teams” sometime in the Autumn season. These teams are an FMC program initiated in 2015, with the aim of bringing in representatives from the industry “develop commercial solutions to supply chain challenges and related port congestion concerns” These team groups will figure prominently in the discussion of other important items; the announcement notes that: “FMC Supply Chain Innovation Team engagement surrounding this proposal will also involve related detention and demurrage charges.”
In her just-released announcement, Commissioner Dye has stressed that: “I am convinced that focused engagement among industry leaders, rather than regulatory solutions, is a better way to develop commercial practices that address critical supply chain bottlenecks and improve the performance of the US international ocean supply chain.”
Reader resources: Commissioner Dye announcement: https://www.fmc.gov/addressing-supply-chain-bottlenecks/
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