Unreasonable Carrier Conduct Rule Too Broad, 'Feckless,' Lawmakers Tell FMC
The Federal Maritime Commission’s proposed definition for a carrier’s “unreasonable” refusal to accommodate U.S. exports is too broad and doesn't meet congressional intent, said Reps. Dusty Johnson, R-S.D., and John Garamendi, D-Calif., who led the House’s passage of the Ocean Shipping Reform Act of 2022.
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“The FMC’s current definition of 'unreasonable' refusal is so feckless it has us wondering: What was the point of passing OSRA in the first place?” the lawmakers said in a statement earlier this month. “This proposed definition is not in line with congressional intent -- it needs to be remedied for the sake of our farmers, exporters, and manufacturers who already faced extreme losses at the hands of foreign carriers.”
The FMC in September issued a notice of proposed rulemaking that requested feedback on the set of factors the FMC should consider when determining whether an ocean carrier is violating shipping regulations by refusing vessel space to shippers (see 2209130040). The Agriculture Transportation Coalition last month urged the FMC to withdraw and rework the rulemaking, saying its language suggests the FMC has a “greater interest” in promoting ocean carriers’ profits than in supporting U.S. exporters (see 2210280051).
In comments to the FMC, Johnson and Garamendi, along with several other lawmakers, said the rulemaking should “account for the significant consolidation within the ocean industry” and address “the ocean carrier’s responsibility to make a good-faith effort to secure the equipment necessary for receiving, loading, carriage, unloading, and delivery of cargo at the ports, such as containers and chassis.”
Johnson and Garamendi said the FMC’s proposed definition for “unreasonable” won’t “protect American shippers and exporters from unfair business practices” of foreign ocean carriers. “The ten largest ocean carriers and three global alliances reportedly control more than 80 percent of the global market,” they said. “As American exporters and other businesses navigate this anticompetitive marketplace, they must have an ally in our nation’s only ocean carrier regulator: the Federal Maritime Commission.”
An FMC spokesperson said the commission is reviewing all comments on the rule and "careful consideration will be given to all issues raised by commenters." It’s unclear whether the commission has enough time to withdraw the rule and draft a new one because it’s facing time pressure from a statutory deadline currently set for December (see 2209210063).