FMC to Engage Ocean Carriers and Terminal Operators on Container Returns

The U.S. Federal Maritime Commission on Wednesday announced a plan to engage with ocean carriers and marine terminal operators as part of a new initiative aimed at improving conditions at the nation’s top container ports.

Six Supply Chain Innovation Teams will be convened by Commissioner Rebecca F. Dye, under her authority as the Fact-Finding Officer for Fact Finding 29, to be comprised of executives from ocean carriers operating in alliances and marine terminal operators that serve them. The aim of the teams will be to identify and implement improvements to the process and timing of return and delivery of containers to marine terminals.

The teams will be focussed on attaining two goals; for truckers to be able to return an empty container to a terminal and pick-up a loaded container, commonly referred to as a “double move,” and certainty and predictability to the earliest return date process to address exporter complaints about the unreliability of the deadline for getting cargo to a terminal. The FMC said efforts will be focussed on the Ports of Los Angeles and Long Beach and New York and New Jersey.

The announcement of the initiative was made Tuesday during a meeting of the Federal Maritime Commission where briefings were provided during open and closed sessions on topics related to market conditions in container shipping, the current state of the ocean-linked supply chain, and the commercial and operational behavior of shipping lines.

“Achieving double moves for truckers would improve trucker productivity and remove a constant source of conflict over container return as well as resolve problems with appointment systems and chassis shortages,” said Commissioner Dye. “Earliest return date confusion is a terrible problem for U.S. exporters. This reform would also remove the constant problem to U.S. agricultural exporters of demurrage and detention charges that are not in compliance with our interpretative rule.”

The FMC ordered Fact Finding No. 29 back in March 2020 to investigate congestion and bottlenecks at ports and other points in the supply chain that pose a serious risk to the U.S. economy. As the Fact Finding Officer, Commissioner Dye is authorized to convene Supply Chain Innovation Teams and engage key stakeholders from across the freight sector in order to identify commercial solutions for some of the worst supply chain problems facing American exporters, importers, and truckers.

In July, Commissioner Dye presented to the FMC with a set of eight Interim Recommendations from the Fact Finding investigation meant to address conditions contributing to congestion and other inefficiencies in the ocean freight system. This latest initiative has received the endorsement of FMC Chairman Daniel B. Maffei.

“I fully support Commissioner Dye’s leadership in addressing these issues and applaud her continuing efforts to use the Commission’s statutory authorities to improve conditions contributing to inefficiencies in the Nation’s ocean supply chain,” said Chairman Maffei.

The first meetings of the Supply Chain Innovation Teams will be held December 1.

The FMC published its final interpretive rule on the reasonableness of ocean carrier and marine terminal operator detention and demurrage practices in May 2020. In a letter last month from FMC Managing Director Lucille Marvin to ocean carriers, the FMC formally called for a “rapid” industry-wide adoption of commonly-employed best practices that the Commission said would promote clarity and certainty about how and when detention and demurrage fees are assessed, as well as how to challenge disputed charges.

In the open session of Tuesday’s meeting, the FMC was briefed on U.S. macroeconomic indicators generally, and their associated impact on shipping, the state of the U.S.-International ocean trades, vessel capacity, and pricing Privately, the Commissioners were briefed on ocean carrier revenue and pricing, capacity, cancelled sailings, and port calls, during a closed session. You can watch the open session of Tuesday meeting below:

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