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FMC Investigations Coincide with Rate Trouble

FMC Investigations

The Federal Maritime Commission (FMC) is looking into retaliation behavior by ocean carriers as they implement the Ocean Shipping Reform Act of 2022. With stronger protections against retaliation and discrimination from carriers, the FMC looks to better level the playing field in 2023. 

 

“The Ocean Shipping Reform Act made it clear that it is absolutely illegal for ocean carriers to discriminate or retaliate against a shipper for filing a complaint or challenging a charge. The FMC will thoroughly investigate any allegation of illegal behavior and prosecute aggressively when warranted. This is something that everyone in a company, from the newest sales associate to the CEO, must understand and that is why the VOCC Audit Team is carrying this message directly to ocean carriers serving the United States. Even a simple verbal threat to a shipper from an ocean carrier employee could undermine U.S. law and will not be tolerated,” said FMC Chairman Daniel B. Maffei.

 

The top twenty ocean carriers are being audited to ensure compliance with OSRA22. This news comes on the heels of a whirlwind drop in ocean rates that has contract rates at a significant disadvantage to the much lower spot rates, especially in the softening trans-Pacific trade lanes. With lower demand for Chinese imports, shippers are better positioned to access manufacturing in other nations where they had to pivot during the pandemic. The problem with the rates coincides with the FMC investigation almost perfectly. One straightforward way carriers have to avoid a rate crash is by using blanked sailings to take capacity out of the market so they can charge more for the ships that are moving. These are the situations that provoked the FMC to act. 

 

While we wish the low ocean rates would lead to significant savings for our customers who can then pass that on as our economy straightens from the pandemic path, but that’s not the case. Carriers have a number of tools in their arsenal to tweak the capacity supply to maintain their positive position, while shippers are relying on the FMC to weed out cheaters and then looking to their logistics partners to advocate for them. 

 

Your representatives at Edward J. Zarach and associates are hard at work planning your cargo connections despite the inevitable disruption coming up for ocean carriers. This isn’t the kind of situation where you want to be late to the preparations, as the first two quarters will likely be more volatile than many are predicting. If you’re ready to get ahead of problems, save money, increase efficiency and meet the coming year with a flourish, contact Zarach today. 

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