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FMC Members Ask Congress for More Authority Over Carrier Agreements

Port of Long Beach terminal with a Cosco container ship
Port of Long Beach (TME / Paul Benecki)

Published Dec 9, 2022 12:29 AM by The Maritime Executive

Two members of the Federal Maritime Commission have asked Congress to change the law to allow the FMC to block anti-competitive agreements between ocean carriers - without first going to court. 

At present, the FMC can't stop an alliance agreement from taking effect, at least not on its own. It has to file suit in federal court and ask a judge for an injunction. Without court intervention, the alliance agreement can enter into force automatically. 

Commissioners Carl Bentzel and Max Vekich want to change that. "Experience has shown that this [court] process is cumbersome and time-consuming, and some would even argue that it is designed to impede the Commission’s oversight of agreements," said Commissioner Bentzel. "We believe the Commission should have the authority to disapprove agreements between or among ocean common carriers and marine terminal operators."

The FMC has new powers under the Ocean Shipping Reform Act of 2022 (OSRA), which gave the agency tools to oversee D&D charges and regulate carrier behavior, including a requirement for carriers to serve American exporters. Bentzel and Vekich argue that adding another power - the authority to approve or reject alliance agreements - would "greatly enhance" FMC's ability to carry out its new mandate. Carriers could still appeal the FMC's decisions to a federal court. 

OSRA is drawing considerable attention from shippers, who have filed more than 175 complaints about ocean carriers' D&D charges since the statute took effect in June. The agency has created a process to adjudicate the complaints, and for the first time, it puts the burden of proof on the ocean carrier to prove that the disputed fees are reasonable. This makes it much easier for small trucking businesses and shippers to bring a complaint to FMC about unreasonable charges.