Shipping regulations should be revised to allow the Federal Maritime Commission to better address unfair detention and demurrage fees, agricultural export issues and a range of other shipping problems at U.S. ports, FMC Chair Daniel Maffei said. While he didn’t propose any concrete changes, he said he is “frustrated” with the situation at the nation’s ports and is speaking with Congress about potentially proposing regulatory changes. “I'm not prepared to go into any details now, but I do think that some things clearly need to be clarified,” Maffei said during a May 5 National Customs Brokers & Forwarders Association of America conference. “There are many, many areas where the law is vague or so outdated because it simply was written mostly in the time of tariffs, and now it's mostly contracts.”

The U.S. needs a national export strategy and a combination of federal support and digital solutions to address ocean carriers declining to carry U.S. agricultural exports, said Gene Seroka, executive director of the Port of Los Angeles. While he thinks the issue can be fixed, Seroka said it will be challenging.

Nearly 300 agriculture groups and companies urged the Department of Transportation to intervene as carriers continue to decline shipments of agricultural exports. The agency should “utilize all existing authorities” and help the Federal Maritime Commission “in expediting its enforcement options” to deal with the carriers, the groups said, which are sending empty containers back overseas rather than filling them with exports because the carriers can charge higher rates for imports (see 2103050014).

The Federal Maritime Commission plans to permanently revise its regulations to give shippers and carriers more flexibility surrounding service contract filing requirements. The change, outlined in an upcoming final rule, will allow ocean carriers to file original service contracts with the FMC up to 30 days after they take effect, the FMC said April 19. The commission had introduced this change on a temporary basis over the past year to help carriers mitigate the impacts of the COVID-19 pandemic but will make it permanent after receiving “positive” feedback from industry. Previously, FMC required carriers to file initial service contracts before they were allowed to receive and move cargo under the terms of that contract. The FMC expects to publish the rule in the “coming weeks” and said it will take effect June 2. It also published an unofficial copy of the rule.

The Federal Maritime Commission met this week with lawmakers and held a separate closed session to discuss its investigation into maritime port issues and reports of carriers declining to accept U.S. exports (see 2011200024). The meetings were the first held under the FMC’s new chairman, Daniel Maffei (see 2103310004), and included an update on the “challenges to the freight delivery system,” the FMC said April 7. Trade groups have complained of unfair detention and demurrage fees and other port issues for months (see 2011170041).

President Joe Biden tapped Daniel Maffei to be the new chairman of the Federal Maritime Commission, the FMC announced March 30. Maffei, a sitting commissioner, replaces Michael Khouri, who was designated to head the FMC by President Donald Trump in 2019. Maffei takes over during a pivotal time for the commission, which is investigating unfair detention and demurrage practices by ocean carriers and other port issues caused by the pandemic (see 2102250039). “Due to the effects of COVID-19 and an unprecedented import boom, we are dealing with serious challenges to America’s international ocean transportation system -- challenges that the FMC has a vital role in addressing, both on its own as an independent agency and in cooperation with other agencies,” Maffei said in a statement. He is a former House member, representing New York.

The Federal Maritime Commission told lawmakers that it is still investigating port issues caused by the COVID-19 pandemic (see 2102020050 and 2102250039), including unfair detention and demurrage fees and reports that carriers are declining to carry U.S. agricultural exports. The FMC has “yet to make any final determinations” on those issues but will take action against any “practices that violate the law,” the commission said in a March 17 letter to House members released this week.

A bipartisan group of lawmakers urged the Federal Maritime Commission to penalize carriers that decline to carry U.S. agricultural exports and asked for monthly updates on the FMC’s investigation into the matter (see 2011200024 and 2102170060). In a March 9 letter, more than 100 House members said they are concerned by reports carriers are sending empty containers back overseas rather than filling them with exports because the carriers can charge higher rates for imports (see 2103050014). “Such activity constricts entire supply chains and propels trade to move only in an inbound direction,” the lawmakers said. “These conditions are unsustainable for exporters, put significant strain on the U.S. economy, and simply unacceptable.”

More than two dozen lawmakers urged the Federal Maritime Commission to penalize ocean carriers for declining to carry U.S. exports, saying the practices may violate shipping regulations and should be met with enforcement actions. Ocean carriers are denying bookings to U.S. exporters because the carriers can charge more for imports, 24 senators from both sides of the aisle said in a March 2 letter. In a separate letter, Rep. Kim Schrier, D-Wash., said the practice is “extremely harmful” to U.S. farmers, especially apple and pear exporters in Washington state.

The maritime shipping industry is struggling to find a short-term solution to the unprecedented congestion occurring at U.S. ports, which continues to impose large costs on traders and further clog the global supply chain, industry representatives said. Although work is being done by the Federal Maritime Commission and Congress to provide relief, they said many of those efforts will do little to ease port issues in the near future.