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FMC ensuring container lines play nice

Photo: Port of LA Ship being assisted by tugboat in port of LA
The US Federal Maritime Commission (FMC) is scrutinising container lines to ensure they are complying with anti-retaliation measures in the Ocean Shipping Reform Act 2022 (OSRA).

Six months ago, President Biden put his signature on OSRA 2022. In the interim, supply chain pressures have eased, with analysts suggesting that a flurry of cargo moving earlier in the year spurred by the cargo side trying to stay out in front of potential backups during the busy Q3 pre-Holidays season, led to a cooling of demand in the second half of the year.

The new legislation provided more mechanisms than previously for cargo interests to lodge complaints about carrier practices. Cargo interest empowerment was effectively the driving force behing the legislation as foreign container lines were painted as the villain extorting US companies and driving up costs. One section of the new law sought to get ahead of possible “retaliation” by the carriers, in response to complaints that might be lodged. The wording is unambiguous, saying: “A common carrier, marine terminal operator, or ocean transportation intermediary, acting alone or in conjunction with any other person, directly or indirectly, may not…. retaliate against a shipper, an agent of a shipper, an ocean transportation intermediary, or a motor carrier by refusing, or threatening to refuse, an otherwise-available cargo space accommodation; or …resort to any other unfair or unjustly discriminatory action.”

A half a year in, the FMC, which oversees liner shipping practices in the States, is asking the top 20 shipping lines calling the United States to provide information on how they are complying with the new prohibitions on retaliation established by OSRA 2022. In its announcement, the FMC says: “The Commission’s Vessel-Operating Common Carrier (VOCC) Audit Team is examining how ocean carriers are adapting to the increased prohibitions on retaliatory and discriminatory behavior. The Team will specifically focus on how companies are training personnel at all levels to act legally, and how those same employees are being made aware of the consequences for violating the law.”

The FMC is taking this issue very seriously, with the agency Chairman, Daniel B. Maffei, saying: “Even a simple verbal threat to a shipper from an ocean carrier employee could undermine US law and will not be tolerated.” The VOCC auditors, who had previously been looking closely at Demurrage and Detention (D&D) issues, are going to be discussing this issue directly with the 11 largest carriers, in particular, according to the agency. The top 11 had been highlighted during discussions of D & D issues, which became prominent during the supply chain congestion of late 2021 and early 2022 and was a catalyst for OSRA 2022.