Exclusive: AgTC Submits Proposals To Address Ocean Shipping Crisis

Just days before a critical hearing before the Subcommittee on Coast Guard and Maritime Transportation about the crisis facing American importers, the Agriculture Transportation Coalition (AgTC) has submitted three legislative proposals to enforce the carriage of trade and excessive penalties U.S. importers are being charged by foreign carriers, American Shipper has learned.

The proposals were sent to the Federal Maritime Commission, as well as representatives on the Senate and House committees that have jurisdiction over ocean shipping.

American Shipper has reviewed the proposed legislation, which includes the following amendment proposals:

— Amendment to gain enforcement of FMC's Detention and Demurrage Rule.
— Amendment to Prioritize FMC's Service to US Exporters, Importers and Others.
— Amendment to Maintain Carriage of US Exports.

"It is painfully apparent to all who export from the U.S., the current ocean shipping regulatory mechanism, and the ability of the Federal Maritime Commission to assure compliance with its rules, is not working," said Peter Friedmann, executive director of the AgTC.

In AgTC communication to members, it was noted U.S. agriculture exporters are reporting on average a loss of 22% of sales.

"The deluge of imports is not the ocean carriers' fault, and the stress on the entire supply chain is an understandable consequence," Freidmann tells American Shipper. "But profiting by imposition of demurrage and detention charges that the FMC has already declared to be unreasonable can no longer be tolerated."

The FMC expanded its Fact Finding 29 investigation into the excessive charges being imposed on U.S. importers and the rejection of trade in November of last year. Recently, the commission announced it is helping importers to collect back unreasonable demurrage and detention fees.

This proposed amendment, which expands on the excessive fees being charged, would require the carriers or terminals to simply confirm, when imposing a detention or demurrage charge, that it complies with the FMC's rule.

"The FMC needs the authority to enforce its very good rule," explained Friedmann. "It needs to become a resource for U.S. exporters and importers in their relations with ocean carriers; this legislation will lead to additional emphasis on this function, and resources devoted to it."

The second amendment would set a specific dollar amount to add staff and resources at the Office of Consumer Affairs and Dispute Resolution Services at the FMC.

In the battle to increase U.S. exports, the final amendment would add to the existing legislation on Prohibited Acts in the The Ocean Shipping Reform Act of 1998. The addition states: "No common carrier, either alone or in conjunction with any other person, directly or indirectly, may — unreasonably decline export cargo bookings if such cargo can be safely and timely loaded and carried on vessels scheduled for that cargo's destination. Violation of this provision shall be subject to penalty as set forth in Section 13 (b)(1) of the Act."

Daniel Maffei, chairman of the FMC, told American Shipper he has reviewed the proposed amendments and appreciates the AgTC for starting the discussion. 

"We are early in the legislative process and it's up to Congress and the committee staff to work this out," Maffei said. "I share most of its goals for exports, but we need to figure out a way to do this. It is a good discussion document, but if enacted as is, there would be unintended consequences."

Maffei explained the FMC is already increasing investment in staffing and data.

"We are a federal agency and monies need to go to specific parts of the FMC," he said. "If we had to dedicate a specific amount of money to a specific part of the commission, that could take away from important areas of the FMC. It could seriously weaken enforcement and monitoring efforts. 

"We may need more enforcement and resources in the long run, but we need to put our fiscal investment into people and data for more bang for the taxpayers buck. We at the FMC will do what we can without legislation while this discussion expands. The details need to be right. We are not there yet. This proposal is just the beginning."

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