Containergeddon’s Aftermath: Importers Should Be Wary of the Federal Maritime Commission’s False Promises
As an experienced shipping industry professional, I have seen the difficulties of the market. However, the current state of the industry has been particularly challenging due to the false hope the Biden administration and the Federal Maritime Commission (FMC) have provided Shippers. In this article, I will discuss the warning signs that importers should be wary of, specifically, the empty promises offered by the FMC and proof that the FMC’s refunding program for overcharges has been an abject failure. I will also explore the role of the FMC in regulating ocean carriers and terminal operators and the potential risks and consequences of ignoring certain warning signs.
Introduction to Containergeddon and the Federal Maritime Commission (FMC)
The shipping industry has been experiencing a crisis that has been dubbed “Containergeddon”. The pandemic caused a significant increase in demand for goods, leading to a shortage of containers, which resulted in a surge in freight rates and terminal chaos, leading to significant detention and demurrage charges. This situation has been exacerbated by the recent events surrounding the FMC. The FMC is the regulatory agency responsible for overseeing the ocean shipping industry in the United States. The agency’s mandate is to promote a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.
What are the warning signs for Shippers?
Shippers should be wary of the recently evolved charge-compliant process initiated by the FMC. The agency has intimated that Shippers are able to solve overspending and recovery issues simply by filing so-called “charge complaints” to the Agency. While the media discusses positive outcomes with the 2022 passed Ocean Shipping Reform Act (OSRA), the media fails to understand the gravity of the situation – so far, few Shippers have been positively impacted by OSRA. The FMC bureaucracy makes for a complex navigation, with most charge cases not even looked into, for lack of merit.
The Ocean Shipping Reform Act has not provided any protection for the American consumer.
The Ocean Shipping Reform Act (OSRA) was enacted in 1998 and just updated in June 2022 to promote competition and provide protection for American consumers. However, the act has not been effective in achieving its goals. The act does not provide any protection for the American consumer, and the FMC’s performance has been subpar, as it has not truly been able to define its mission since it is a Governmental agency.OSRA has also tried, but in my opinion, has failed to put any “teeth” into addressing the area of refund and recovery of detention and demurrage fees, which have been a significant source of financial loss for shippers.
The FMC’s role in regulating ocean carriers and terminal operators
The FMC’s role in regulating ocean carriers and terminal operators is to ensure that they comply with the Shipping Act of 1984. The act requires carriers to provide services at reasonable rates and to prevent unfair and discriminatory practices. The FMC also has the authority to investigate complaints from shippers and to take action against carriers that violate the act. However, the FMC has been criticized for being slow to respond to complaints and for not taking sufficient action against carriers that violate the act.
Recent changes in FMC regulations and their impact on importers
The FMC has recently made changes to its regulations that have had a significant impact on importers. The agency has opened up “charge complaints” to Shippers, allowing them to bypass certain regulatory requirements. However, this has resulted in the “wild west” of Shipper direction and consistency, making any charge complaint petition, more miss, than hit…
The potential risks and consequences of ignoring warning signs
The FMC has not accomplished anything to protect the American consumer. The fact that Shippers have paid over $10 billion in unwarranted fees, yet the FMC has helped collect only $700,000 should tell beneficial cargo owners to run the other way. Commercial solutions like www.oceanaudit.com provide vastly more efficient and professional services to review and recover overpaid ocean freight, detention, and demurrage overcharges. Those Shippers waiting for the FMC to come over the hill and save the day are in for a long, unprofitable wait.
How Shippers have 3 years from the date of “harm” to correct overcharges, but with the FMC, only from the effective date of the Ocean Shipping Reform Act of June 16, 2022
Shippers have three years from the date of “harm” to correct overcharges. However, with the FMC, shippers only have three years from the effective date of the Ocean Shipping Reform Act of June 16, 2022. This means that shippers may not be able to recover overcharges that occurred prior to this date.
Private commercial options for Shippers to consider in recovering ocean freight, detention, and demurrage refunds.
Shippers have several private commercial options for recovering ocean freight, detention, and demurrage refunds. These options include freight auditing and payment services, transportation management software, and logistics consulting. These services can help shippers to identify overcharges and recover refunds.
Resources for staying informed about FMC regulations and industry developments
Shippers can stay informed about FMC regulations and industry developments through industry publications, trade associations, and government websites. These resources can provide shippers with information on regulatory changes, industry trends, and best practices.
Conclusion: The need for vigilance and proactive risk management in the shipping industry
In conclusion, the shipping industry is facing significant challenges, including Containergeddon and the recent events surrounding the FMC’s faux attempts at recovery and remediation of overcharges. Shippers must be vigilant and proactive in managing risks in the industry. This includes conducting due diligence when selecting carriers and operators, considering private commercial options for recovering refunds and staying informed about FMC regulations and industry developments. By taking these steps, shippers can protect themselves from financial losses and ensure a reliable and efficient supply chain.
CTA:
If you are an importer or involved in the shipping industry, it is essential to stay informed about the FMC’s regulations and industry developments. Consider subscribing to industry publications, joining trade associations, and regularly checking government websites. Additionally, consider private commercial options for recovering ocean freight, detention, and demurrage refunds. By being proactive and informed, you can protect your business from financial losses and ensure a reliable and efficient supply chain.