The U.S. Federal Maritime Commission voted to temporarily allow parties to file service contracts up to 30 days after they take effect, as a measure to relieve COVID-19 impacts to the supply chain.
The Commission published an order today making the relief effective immediately and lasting through December 31, 2020.
The benefits of service contract filing relief were identified by the Fact Finding 29 Supply Chain Innovation Teams working under the direction of Commissioner Rebecca Dye.
“The criticality of supply chains is something the Federal Maritime Commission understands well, which is why Fact Finding 29 was ordered. Our prompt consideration and approval of a temporary amendment to how service contracts are filed at the FMC demonstrates our commitment to keeping America’s ocean supply chain functioning reliably and efficient,” said Chairman Michael A. Khouri.
A unifying theme in the initial meetings of the Supply Chain Innovation Teams was that service contract negotiations are being disrupted for a variety of COVID-19 related causes. In particular, many service contracts are expiring in the next 60 days and teleworking arrangements are complicating ongoing negotiations between carriers and shippers. Additionally, some businesses are technically challenged to file service contracts from locations other than their offices. Providing flexibility in service contract filing requirements permits industry to adapt to market conditions while still providing the Commission information necessary to assure competition and integrity for America’s ocean supply chain.
“One suggestion I made to the Supply Chain Innovation Team members was to identify steps the Federal Maritime Commission can take to mitigate negative impacts on the supply chain related to COVID-19. The quick identification by individual shippers and ocean carriers of relief from service contract filing and the Commission’s rapid adoption of this measure are positive early developments for the Teams’ work,” said Commissioner Dye.