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Thursday, October 22, 2020

Ocean Transportation Intermediaries News

“The mis-declaration of hazardous materials is an area where we work in cooperation with Customs and Border Protection and the U.S. Coast Guard. The FMC’s Shipping Act concern is the market fraud when a shipper declares to a common carrier in its shipping documents that the tendered cargo is some innocuous variety, when the cargo is properly categorized as hazardous; thereby receiving a lower freight rate.”
– Michael A. Khouri, Chairman, Federal Maritime Commission (FMC)

© Pawinee/AdobeStock

FMC: Ocean Shipping Challenges Abound

Since early Spring 2020, American consumers have received a practical education in supply chain operations. One lesson is that it takes more than simply going online and clicking a “Buy Now” button for goods to show-up on our front porches. While the networks and systems that deliver commodities from around the globe might have been stretched as a result of COVID-19 related impacts, the men and women who move the freight have worked selflessly and tirelessly to meet consumer and manufacturing demand.Early on in the response to COVID-19…

© Mihai Andritoiu / Adobe Stock

Will FMC's New Demurrage & Detention Rules Aid NVOCCs?

On April 28, 2020, the Federal Maritime Commission (FMC) released the long-awaited interpretive rules in Docket No. 19-05 relating to how ocean common carriers may lawfully apply demurrage and detention charges to exporters, importers and ocean transportation intermediaries, including Customs brokers in certain circumstances and still be compliant with the “reasonableness” requirement of 46 U.S.C § 41102(c). The analyses and guidance in the interpretive rules have been in high…

© Mariusz / Adobe Stock

FMC Issues New Guidance on Detention and Demurrage

The U.S. Federal Maritime Commission has issued new guidance about how it will assess the reasonableness of detention and demurrage regulations and practices of ocean carriers and marine terminal operators (MTOs) under 46 U.S.C. 41102(c).The final rule, “Docket No. 19-05, Interpretive Rule on Demurrage and Detention under the Shipping Act”, will become effective upon its publication in the Federal Register.Under the new interpretive rule, the Commission will consider the extent…

© Sandra / Adobe Stock

COVID-19 Impacts on Demurrage and Detention

What might not be so obvious in this COVID-19 environment, which we have grown to associate with shortages, is that counterintuitively there are issues beginning to appear dealing with the opposite situation. The Journal of Commerce has reported that “[t]he container shipping industry is marshaling a response to signs of a building import backlog as some retailers and manufacturers fail to pick up containers because warehouses are full or closed due to not being deemed essential…

© Mihai Andritoiu / Adobe Stock

FMC Investigating COVID-19's Suply Chain Impacts

The Federal Maritime Commission issued an order authorizing Commissioner Rebecca Dye to identify operational solutions to cargo delivery system challenges related to Coronavirus-19.The Order notes that “Recent global events have only highlighted the economic urgency of responsive port and terminal operations to the effectiveness of the United States international freight delivery system. Given the Commission’s mandate to ensure an efficient and economic transportation system for ocean commerce…

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New OTI Rules Now in Effect

Non-vessel-operating common carriers (NVOCC) will now need their required bond, insurance or other form of surety and their Form FMC-1 (published tariff location) on file before the US Federal Maritime Commission (FMC) will issue their NVOCC license.This new requirement is one of several changes to Commission regulations governing ocean transport intermediaries (OTI) contained in a Final Rule, “Licensing, Registration, Financial Responsibility Requirements, and General Duties for Ocean Transportation Intermediaries” (Docket No.

(© Marco 2811 / Adobe Stock)

Hong Kong Follows US FMC Lead on Liner Sharing Data

Maintaining Separate Identities and Sharing of Competitive Information in U.S. Since the advent of the proposed, but never implemented, P3 Alliance in 2013, the sharing of commercially sensitive information between parties to a vessel sharing agreement (VSA or Alliance) has been a hot topic. The proposed P3 Network Vessel Sharing Alliance (P3 Alliance) would have consisted of Maersk, CMA CGM and Mediterranean Shipping Company (MSC); the world’s three largest ocean carrier companies by volume of containers carried.

FMC Commissioner William P. Doyle

Cyber Attacks Threaten Shipping & Dominate Maritime News

The maritime industry must redouble its efforts to secure IT systems and data. In June, Maersk Line A/S’s information systems were severely disrupted by the so-called Petya virus. FMC provided Maersk with relief to help them get through the difficult situation. In Mid-July, a researcher penetrated a ship’s internet system through its very small aperture system (VSAT). The ship was operating in the South America trade. An internet security researcher identified as “x0rz” discovered that many shipboard VSAT systems can be penetrated through the public internet…

(File photo: A.P. Moller - Maersk)

Maersk Temporarily Exempt from Service Contract Filings

I voted in favor of Maersk Line A/S’ petition for Temporary Exemption Service Contract Filings as a result of the so-called Petya virus which severely disrupted Maersk’s information systems, including the system that stores service contract data. Due to this cyber attack, Maersk Line had been unable to determine which shippers to contact in order to extend or renegotiate certain service contract rates. Further, even if Maersk was able to identify which contracts needed attention, the company was not be able to electronically file the documents because of the damage caused by the virus.

(Photo: Maersk Line)

A Full Agenda for the International Container Trades

The past couple of months have been chock-a-block full of maritime activity in the international container trades. As the Big-3 Japanese Lines remain still on track to spin-off their container business units into a single standalone container carrier company, some delayed merger and acquisition activity is finally moving ahead. Separately, Congress has taken a keen interest in the Shipping Act. On May 2, 2017, the U.S. Federal Maritime Commission (FMC), unanimously voted to reject the Tripartite Agreement proposed by Kawasaki Kisen Kaisha, Ltd. (K Line); Mitsui O.S.K. Lines Ltd.

Photo: Port of New Orleans

Full Ahead: New Generation of Carrier Alliances

Full ahead: new generation of carrier alliances and slot/vessel sharing arrangements; SM’s (Bullet) Line; FWE for Hanjin. On April 1, 2017, the new generation of carrier alliances became reality. In the run up to April 1 there was a flurry of activity with ocean carriers entering into arrangements with other carriers in competing alliances and with other carriers not signatory to any of the alliances. The 2M Alliance is an existing alliance made up of Maersk Line and Mediterranean Shipping Company (MSC).

Photo: FMC

FMC Collects $338,000 In Penalty Payments

Federal Maritime Commission Chairman Mario Cordero announced that the Commission has completed compromise agreements recovering a total of $338,000 in civil penalties. The agreements were reached with one vessel-operating common carrier and six ocean transportation intermediaries (both non-vessel-operating common carriers and ocean freight forwarders). The agreed-to penalties resulted from investigations conducted by the Commission’s Area Representatives in Houston, Seattle, South Florida, and New York, and by Washington D.C. headquarters staff.

Photo: Federal Maritime Commission

FMC: Update Regarding Commission Briefings on the Status of Hanjin Shipping

The status of Hanjin Shipping and the disruptions caused by its bankruptcy to the American shipping community, as well as global supply chains, was examined closely by the Federal Maritime Commission during the closed session of the September 20, 2016 public meeting. Commissioners were briefed by staff from the Office of the General Counsel; the Bureau of Trade Analysis; the Bureau of Enforcement; and the Office of Consumer Affairs & Dispute Resolution Services about a variety of developments related to the insolvency of Hanjin Shipping. Topics addressed included: proceedings in the U.S.

Maritime Leaders Convene in the Caribbean

Representatives from all aspects of the maritime shipping industry met in Cocoa Beach, Fla., May 16-18 for the Caribbean Shipping Associations’ (CSA) Shipping Executives Conference. Attendees include shippers, ship owners, port authorities and terminal operators, and non-vessel owners, such as brokers. A major theme of the conference was the close relationship between Florida ports and the Caribbean markets. “Florida ports have had a long relationship of trade with the Caribbean nations…

William P. Doyle

Senate Confirms Doyle to Another Term

The United States Senate confirmed William P. Doyle to another term in office as a Federal Maritime Commissioner on the evening of March 23, 2015. The vote was a unanimous 89 in favor, 0 opposed, and 11 senators not voting. Upon confirmation, Commissioner Doyle said, “I would like to thank President Obama for his confidence in me, and I would also like to thank the U.S. Senate for taking up my nomination today. William Doyle was originally confirmed by the Senate on January 1, 2013 to fill the unexpired term of former Commissioner Joseph Brennan.

FMC Commissioner William P. Doyle

FMC Commissioner Doyle Weighs In

Commissioner William P. Doyle's remarks at the Commission Briefing on Mid-Atlantic and Northeast Port Congestion Forum, November 13 2014 in Baltimore, MD. On October 1, 2014, Commissioner Lidinsky and I hosted the Mid-Atlantic and Northeast Port Congestion Forum at the World Trade Center in Baltimore, Maryland. I want to thank all the FMC staff for their participation in setting up and managing the day’s event. David Tubman and Jewel Jennings-Wright worked tirelessly for weeks helping to locate attendees and participants. Thank you both.

FMC Forum to Address US Port Congestion

U.S. Federal Maritime Commission (FMC) Chairman Mario Cordero will hold a forum titled, "U.S. Port Congestion: Examining Causes, Impact on Stakeholders and Exploring Possible Solutions" Monday, September 15, 2014, 9:30 a.m. to 4 p.m. at the Port of Los Angeles. According to the FMC, the forum’s goal is to promote dialogue on the causes and implications of congestion at U.S. ports. Topics covered will include factors causing port congestion, truck turn times, impact on stakeholders, use of technology to reduce congestion and related fees and PierPass.

Mario Cordero (Photo: FMC)

FMC Public Forum on US Port Congestion

Federal Maritime Commission (FMC) Chairman Mario Cordero will hold a forum titled, "U.S. Port Congestion: Examining Causes, Impact on Stakeholders, and Exploring Possible Solutions" on Monday, September 15, 2014, from 9:30 a.m. to 4 p.m. in the Port of Los Angeles’ administration building in San Pedro, Calif. According to FMC, the forum’s goal is to promote dialogue on the causes and implications of congestion at U.S. ports. Industry stakeholders, regulators, and the general public are encouraged to take part.

FMC Recovers $503,000 in Penalties

Chairman Mario Cordero announced that the Federal Maritime Commission has completed compromise agreements recovering a total of $503,000 in civil penalties. The agreements were reached with five non-vessel-operating common carriers (NVOCCs), two unlicensed transport businesses and one vessel-operating common carrier. The agreed penalties resulted from investigations conducted by the Commission’s Area Representatives in Miami and Los Angeles, and Washington D.C. headquarters staff.

 Commissioner William P. Doyle of the Federal Maritime Commission (FMC)

FMC Commissioner Doyle Announces China VAT Issue Webcast

New explanation issued from China on definition of “agents” in Circular 106. Industry briefing scheduled for March 6, 2014 concerning the latest information on China’s Value Added Tax regime and its impact on the maritime industry. Commissioner William P. Doyle of the Federal Maritime Commission (FMC) today announced that he will be participating in a webcast that will take place on March 6, 2014, on matters related to China's Value Added Tax (VAT) regime, with specific emphasis on China's release of Circular 106, as it affects carriers, shippers and ocean transportation intermediaries.

FMC Commissioner William P. Doyle

Webcast to Address China VAT Reform Announced

China’s Ministry of Finance and State Administration of Taxation released Circular 106 last December, expanding its value-added tax (VAT) pilot program to additional industries. The circular also made significant updates to the VAT treatment of services related to the international transportation of goods. During the week of January 20, 2014, China provided further clarifications for freight forwarding agent companies in China with regard to Circular 106. In light of the potential impact these changes may have on U.S.

William P. Doyle, FMC Commissioner

Regulatory Profile: William P. Doyle, Commissioner of the Federal Maritime Commission

If the Federal Maritime Commission remains somewhat of an enigma to domestic maritime stakeholders, perhaps that’s because its scope of oversight reaches many sectors of maritime business; some more obscure than others. In February, we caught up with FMC commissioner William P. Doyle, who provided the perfect primer on this important agency. What does it take to become a Federal Maritime Commissioner? Doyle was sworn in on January 10, 2013 as Commissioner of the Federal Maritime Commission.

Ocean Carriers, Others Pay Penalties

The Federal Maritime Commission announced four compromise agreements in which an ocean carrier and intermediaries agreed to pay a total of $625,000 in civil penalties for alleged violations of the Shipping Act of 1984. The agreements were reached with a vessel-operating common carrier (VOCC) and three ocean transportation intermediaries (OTIs). The agreed penalties resulted from investigations conducted by the Commission's Area Representatives in Los Angeles, Seattle, South Florida, and Washington, D.C. Staff attorneys with the Bureau of Enforcement negotiated the compromise agreements.