The Federal Maritime Commission is continuing with the implementation of the 2022 Ocean Shipping Reform Act to meet the congressionally mandated deadlines. One area of particular concern is the actions of ocean carriers as well as a shifting of a greater level of responsibility to the carriers in efforts to address the complaints of U.S. shippers.
During the development of the act, shippers and their associations repeatedly complained to the U.S. Congress about abuses by ocean carriers. They cited numerous examples of what they said were exorbitant fees. Even before the passage of the reform legislation, the FMC in July 2021 launched its Vessel-Operating Common Carrier (VOCC) Audit program with its first focus on demurrage and detention (D&D) fees.
The FMC is now focusing its VOCC audit team on another key complaint of shippers, which was retaliation or threats from carriers against shippers. The reform act contains specific prohibitions on retaliation. The FMC reported in general that since the passage of the act in June it had seen a strong rise in complaints mostly related to charges. They received 175 filings in less than six months. Numerous complaints have been filed against the largest carriers ranging from MSC to Maersk as well as Zim, Wan Hai, and others by mostly smaller companies but also included a complaint under investigation from Samsung Electronics over a failure to provide services. A smaller California-based logistics company, MVM, alleged that MSC had locked the company out of its terminals over a dispute regarding fees.
“The Ocean Shipping Reform Act made it clear that it is absolutely illegal for ocean carriers to discriminate or retaliate against a shipper for filing a complaint or challenging a charge. This is something that everyone in a company, from the newest sales associate to the CEO, must understand and that is why the VOCC Audit Team is carrying this message directly to ocean carriers serving the United States. Even a simple verbal threat to a shipper from an ocean carrier employee could undermine U.S. law and will not be tolerated,” said FMC Chairman Daniel Maffei.
The Audit Team has launched an examination asking the top 20 shipping lines calling the United States to provide information on how they are complying with the new prohibitions in the reform act on retaliation. 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 of violating the law.
The FMC had recommended that carriers and marine terminal operators designate an FMC compliance officer who reports directly to the most senior executive responsible for business in the United States. The VOCC Audit Team is now interacting with these compliance officers and will discuss this topic in person and in deeper detail with the 11 largest carriers participating in the next round of meetings through the VOCC Audit Program.
The examination began earlier this week with correspondences to the top 20 carriers. The FMC gave the carriers until mid-January to provide their initial responses.
