FMC Investigates Congestion Surcharges - Is Relief Coming Soon?
In a much welcome if not overdue turn of events, the Federal Maritime Commission (FMC) followed up their recent launching of the Ocean Carrier Audit Program with a more direct, specific, and timely order for an audit of several major carriers.
FMC Puts Foot Down on Carrier Congestion Surcharges
On August 4, the Federal Maritime Commission announced a formal and expedited review process for eight specified carrier companies, those being CMA CGM, Hapag-Lloyd, HMM, Matson, Mediterranean Shipping Co., OOCL, SM Line, and Zim.
Per the FMC’s announcement, “the Federal Maritime Commission has launched an expedited inquiry into the timing and legal sufficiency of ocean carrier practices with respect to certain surcharges.” More specifically, the FMC is requiring that these eight carriers provide “details about congestion or related surcharges they have implemented or announced.”
The FMC has given the named ocean carriers until August 13 of this year to comply with their demands for documentation regarding congestion surcharges and demurrage and detention practices.
What Does This Mean for Shippers?
While we were cautiously optimistic after the FMC announced their new audit program in July, this recent order for an expedited audit with a reasonable yet speedy turnaround time is certainly promising for shippers. The record high shipping rates with exorbitant demurrage and congestion surcharges piled on top seems to be finally reaching a tipping point.
FMC Chairman Maffei, who heads the recently created Ocean Carrier Audit Program, certainly seems to be getting the message from shippers loud and clear. In the closing lines of this week’s FMC announcement, Maffei sides with shippers regarding the fairness of carriers piling surcharges on top of already sky-high freight rates. He states, “It seems to me that these factors would have been included into the record high rates charged by the carriers.”
This is a solid right hook in the ongoing battle against unfair carrier practices, but it’s still much too soon to ring the bell. The real test for whether the FMC’s new audit program can make a difference for shippers will be when it comes time to dole out punishments. If the FMC is all bark and no bite, carriers are unlikely to make a sudden about-face regarding policies that are improving their bottom-line.
Regardless of what happens, ClearFreight is always ready to help see you through all your logistics nightmares one easy step at a time. Get in touch with our logistics experts to learn how our supply chain solutions can help make logistics easier for you.