A U.S. shipper group sent a letter to Congress urging them for more oversight of ocean transportation in a letter to Congress on Wednesday, May 19, 2021. The group said the current system has caused severe delays and cost importers and exporters.
The National Industrial Transportation League (NITL) has proposed four main updates to The Shipping Act of 1984, which is regulated by the U.S. Federal Maritime Commission (FMC):
- Prohibit common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention rules and practices.
- Require carriers to adhere to minimum service standards with respect to equipment and vessel space allocations and contract performance, and require contingency service plans during periods of port congestion to mitigate supply chain disruptions.
- Address unfair business practices that relate to access to, allocation of and interchange of equipment, as well as unreasonable allocations of vessel space by ocean common carriers considering foreseeable import and export demand.
- Expand the FMC’s authority to act on complaints filed against anti-competitive agreements between ocean carriers that operate with antitrust immunity, such as alliances, and allow third parties to participate in court proceedings initiated by the FMC against such agreements.
The proposal is designed to provide remedies for importers and exporters who are experiencing unprecedented shipping costs, are unable to obtain adequate ocean transportation service to meet their cargo delivery needs and are concerned about unfair business practices.
The NITL contests that the existing Shipping Act is out of date and fails to protect U.S. shippers against the extreme challenges impacting their supply chains. The NITL is focused on getting shippers more rights for legal claims against ocean carriers; for example, in cases of detention and demurrage charges they propose formal regulations that shift “the burden of proof for complaints onto the service providers to show that their practices are reasonable and comply with the rules.”
READ: NITL LETTER TO CONGRESS
Representing the steamship line industry, the World Shipping Council (WSC) warned that NITL’s proposed reforms would threaten the stability of the U.S. ocean transportation system by going from a free-market to an overly regulated industry.
The NITL, however, insist the reforms are necessary and would require ocean carriers to make both equipment and vessel space readily available develop contingency plans in case of high demand. These changes would also allow the FMC to act against anticompetitive agreements that currently protect alliances within the shipping industry.
“The NITL proposal addresses many of the problems faced by the shipping community and seeks to address gaps in the current law. While the League strongly commends the regulatory efforts in recent years initiated by the FMC, we believe the agency and shipping industry would benefit greatly from these proposed reforms that are targeted to address present day challenges,” said Fellmer. The League was instrumental in the efforts leading up to the 1998 amendments to the Shipping Act and looks forward to working with the Congress, the FMC, and all industry stakeholders to address the critical challenges faced by importers and exporters and others by updating this important federal law.
READ: NITL LETTER TO CONGRESS
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