FMC Expands Inquiry to Examine Shipping Surcharges

(Source: Dominik Luckmann, Unsplash)

The Federal Maritime Commission (FMC) is launching an inquiry into ocean carrier surcharges, including congestion surcharges related to the ongoing surge in freight demand. The FMC’s inquiry expands upon its initial investigation, which focused on excessive container fees, limited container availability, and potential carrier retaliation against shippers.

Eight major ocean carriers – CMA CGM, Hapag-Lloyd, HMM, Matson, MSC, OOCL, SM Line and Zim- have been asked to provide the FMC’s Bureau of Enforcement with details about their congestion surcharges and any related charges. In the U.S., oean carriers must meet specific regulatory requirements for tariff changes or rate increases, including a 30 day notice period for shippers.

“The COVID-related spike in demand for imports has pushed cargo rates to record highs. Now, we hear increasing reports of ocean carriers assessing new additional fees, such as ‘congestion surcharges,’ with little notice or explanation,” stated FMC Chairman Dan Maffei.

Based on the ocean carriers’ responses, the FMC will determine if surcharges were implemented unfairly or illegally. If it finds any improperly-established tariffs, the Commission may take enforcement action.

The FMC inquiry comes as increasing demand, combined with ever-complex supply chain issues, elevate freight rates on virtually all container routes. Strong consumer demand, combined with widespread container shortages, have added to several unusual financial dynamics- for example, the high profitability of shipping “empties” back to China as quickly as possible, in order to be loaded with cargo and quickly reshipped back to the U.S.. This surge also created backlogs at U.S. West Coast ports, causing sdditional delays, affecting consumers globally.

The above is a summary of one or more news stories reviewed by the author of this article. It may contain comments or views of the author only.

This article is intended for general interest and does not constitute legal advice.

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