FMC takes new action on container congestion

containers at the Port of LA Carriers and terminal operators will have to provide information on their policies and practices related to container returns and container availability. Photo: Port of Los Angeles

The Federal Maritime Commission (FMC) is taking a new step to help address container congestion at US ports.

Information demand orders will be issued to ocean carriers and marine terminal operators (MTOs) to determine if legal obligations related to detention and demurrage practices are being met. The orders will also require carriers and MTOs to provide information on their policies and practices related to container returns and container availability for exporters.

Targets of the orders will be ocean carriers operating in an alliance and calling the Port of Los Angeles, the Port of Long Beach, or the Port of New York & New Jersey. Marine terminal operators at those ports will also be subject to information demands.

Failure of carriers and MTOs to operate in a way consistent with the Interpretive Rule on Detention and Demurrage that became effective on 18 May 2020, might constitute a violation of 46 USC 41102(c) which prohibits unjust and unreasonable practices and regulations related to, or connected with, receiving, handling, storing, or delivering property.

Information received from parties receiving demands may be used as a basis for hearings, Commission enforcement action or further rulemaking.

In November 2020, the FMC gave the go-ahead for an investigation into whether ocean carriers operating in alliances are contributing to congestion and underperformance at three major ports in the country.

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