Client Alert
Federal Maritime Commission and COVID-19
April 7, 2020
By:
As has been the case with numerous other agencies, the Federal Maritime Commission (FMC) has undertaken a role to attempt to ameliorate some of the enormously disruptive effects on trade that have been caused by the COVID-19 pandemic. On March 31, 2020, the agency first opened Fact Finding Investigation No. 29 (FF No.29) in an attempt to identify solutions for some of the issues. And, Commissioner Rebecca Dye was appointed as the Fact Finding Officer with authority to establish one or more supply chain innovation teams (Innovation Teams).
As you may recall, the FMC had previously opened a formal investigation in Fact Finding No. 28 (FF No. 28) for the purpose of providing guidance as to what constitutes “just and reasonable practices” with respect to the assessment of demurrage, detention, and per diem charges by vessel operating common carriers and marine terminal operators. At that time, Commissioner Dye and her Innovation Teams were able to develop proposals to address issues surrounding demurrage and detention, which resulted in issuing a proposed interpretive rule on demurrage and detention, 84 Fed. Reg. 50369-50370 (Sept. 13, 2019). A final decision on that is expected shortly.
As was the case with the demurrage/detention investigation, the Innovation Teams will consist of leaders from all commercial sectors of the U.S. international supply chain. On April 6, 2020, the FMC provided notice that Commissioner Dye and her innovation teams intend to convene work this week to identify what actions can provide the shipping industry with immediate relief from the challenges faced due to COVID-19 related disruptions. With that in mind, Commissioner Dye is posing the following questions to each team member:
1. What can the FMC do to provide relief or assistance to mitigate negative impacts on the supply chain related to COVID-19?
2. What can companies involved in ocean cargo delivery do to respond to existing supply chain challenges and bottlenecks?
3. What can supply chain actors do to strengthen the overall performance of the American freight delivery system?
Hopefully, with the teams working together, some solutions may be found to at least temper the most harmful effects of this crisis.
As COVID-19 has greatly affected the shipping industry due to quarantines, travel restrictions, delays in processing cargo, a lack of cargo storage space, and millions of containers laying idle, the FMC has opened this topic up to all industry stakeholders. Accordingly, the NVOCCs, as well as the vessel operators, marine terminal operators, shippers and truckers have the opportunity to provide both comments and suggestions that can and should be considered. It is highly likely, of course, that topics including force majeure, demurrage, detention, customs holds, chassis shortages and delays will be addressed; but given the diverse nature of the problems, the FMC would welcome the participation of as many members of the industry as possible.
This is a great opportunity for you to present information regarding the challenges your company has experienced due to the COVID-19 pandemic. We encourage you to participate and provide comments. Anyone wishing to participate can do so by submitting information and/or comments to Commissioner Dye at the following email address: ff29@fmc.gov.
If you have any questions or wish assistance in drafting comments, please feel free to contact us.