Carriers Still Have 'Work to Do' to Improve Export Services, FMC Official Says
While most carriers that participated in the first round of the Federal Maritime Commission’s recent export audit have commendable export strategies, others have room for improvement, FMC official Lucille Marvin said. “I think that there is some work to do," Marvin told commissioners during a May 18 meeting. “The location of the exports, the location of the equipment -- none of this stuff is always in sync with each other. I think this is going to be an ongoing challenge that we have.”
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FMC in April completed the first round of the audit, where carriers were asked about their export strategies for agricultural exports, empty containers and other ways they are serving U.S. exporters (see 2204250012). Marvin said most “were able to articulate strategies for serving exports,” and a few even had “very sophisticated and well established strategies for their export programs.” But a portion of them need to be better, she said.
Several FMC commissioners criticized what they said are unfair carrier or terminal practices that have hampered exporters. They specifically pointed to cases in which carriers impose demurrage fees on containers even if the ship hasn’t arrived at the port. Commissioner Rebecca Dye called it a “ridiculous situation.”
“Most carriers told me they don't do that anymore,” Dye said. “I’m hopeful that as we look more closely at their worst problem, which involves the earliest return date, we can work together and drive some change in that area.”
Commissioner Louis Sola agreed, saying exporter issues are his “main” concern. “I do have a problem ethically with charging for an export container that is dropped off at the port and it’s not able to get on a ship in time, and then they’re given a bill,” Sola said.
FMC should work closer with USDA on the issue, said Commissioner Max Vekich, echoing a recommendation from Dye earlier in the meeting (see 2205180056). He said FMC should “tap everybody we can to enlist their help,” adding that the agency is facing mounting pressure from Congress. More than 100 lawmakers urged FMC last year to penalize carriers that decline to carry U.S. exports in favor of imports (see 2103100027).
“I certainly know from my confirmation hearings there’s an appetite from Congress,” Vekich said. “They're looking for answers from this agency and the people we talk to.”
Commissioner Carl Bentzel also said FMC should work closer with USDA because many of the declined exports involve agricultural goods. “This is an issue of whether or not a decline in exports is unreasonable, and so a lot of that does go into the character of the movement,” Bentzel said. “We're going to be focused on this issue for a long time, so we need to start to think about those elements.”
Although some carriers need better export strategies, Marvin said more than half of the 11 carriers that participated in the audit have export policies, and a couple are placing a “major focus” on moving exports. “That is something that they try to ensure,” she said, “that they take whatever exports are thrown their way and they get them out.”
She also stressed that moving exports has been a challenge for many carriers. “The economics and business models involved in moving exports are complex. It’s not simply a matter of taking a box and filling it and moving it,” Marvin said. “Often the location of the empties are not where the export loads are, and the types of equipment needed varies.” She said she hopes the FMC will “continue to get more information” from the carriers in future audits.