The World Shipping Council (WSC) today filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit seeking to have the Federal Maritime Commission (FMC) correct an internal contradiction in its new rule on detention and demurrage. 

The Shipping Act establishes rules that provide legal certainty to ocean carriers to share space on ships while ensuring competitive markets. Being able to share space on ships allows more carriers to provide more services more efficiently to more ports than carriers could provide individually. That is good for shippers, ports, consumers, and all of the workers that keep the global supply network running. H.R. 1696 would remove that system and undermine competitiveness and choice for liner shipping services.

The FMC Chairman today issued a statement that ascribes improper motivations to a regulatory comment about an important environmental issue that WSC and PMSA raised in the FMC’s detention and demurrage rulemaking.  We respectfully but categorically reject the Chairman’s characterization.  Our Petition for Review was submitted in the manner provided for in the rulemaking process, and as required by federal law and regulation.

Today the President signed the Ocean Shipping Reform Act into law. The Federal Maritime Commission now has the important task of implementing the law so that it fulfils its core objective to support “an ocean transportation system that is competitive, efficient, and economical.”

Today’s vote on The Ocean Shipping Reform Act (OSRA) marks the conclusion of the legislative phase and transition to the Federal Maritime Commission rulemaking process. We appreciate the time and effort that Congress has put into crafting this bill and look forward to engaging in productive conversations with the Federal Maritime Commission to implement OSRA in a way that will minimize disruption in the supply chain.

The American people are looking for solutions to supply chain congestion resulting from the impacts of COVID-19. Unfortunately, the Ocean Shipping Reform Act of 2022, S.3580, which was marked up today by the Senate Commerce Committee, addresses none of the root causes of the U.S. landside congestion.

Here are the facts: container shipping is a competitive industry with multiple ocean carriers actively challenging one another in the global marketplace and on the shipping lanes most relevant for U.S. trade,” said John Butler, President and CEO of the World Shipping Council. “It is disappointing that unfounded allegations are being levied against an industry that is moving more cargo right now than at any time in history in order to meet the unprecedented demand for imported goods during the pandemic.

“It is unfortunate that the President is demonizing ocean carriers, the industry that is the backbone of the U.S. and global economy and that has been working around the clock through the pandemic to move more cargo than at any time in history.

Allegations that the container shipping industry is highly concentrated and uncompetitive are factually incorrect. Ocean carriers actively compete against one another in the global marketplace, including on the shipping lanes most relevant for U.S. trade, while concentration levels in many other U.S. industries are markedly higher than those in container shipping. In a clear sign of a competitive market responding to increased demand, competition increased in 2021, with more ships operated by a larger pool of carriers serving the trans-Pacific trade.

“Ocean carriers have deployed every available ship and container to move the continuing record levels of cargo resulting from pandemic-driven U.S. demand for imports—but when ships cannot get into port to discharge and load cargo because of landside logistics breakdowns, it is clear that further regulating ocean carriers will not solve the deeper challenges in U.S. supply chains,” says John Butler, President & CEO of the WSC.

“The House today passed HR 4996 without proper debate or committee process.  The bill is a political statement of frustration with supply chain challenges – frustrations that ocean carriers share.

The problem is that the bill is not designed to fix the end-to-end supply chain congestion that the world is experiencing, and it will not and cannot fix that congestion.

The World Shipping Council will continue to work with the Congress to seek real solutions that further strengthen the ocean transportation system that has supported the U.S. economy throughout the pandemic.”

The Covid-19 cargo congestion brought on by extreme demand in combination with operational disruptions is very real and felt across supply chains globally. In the U.S. in particular, all parts of the supply chain are facing unprecedented pressures – there is a lack of rail and truck capacity, warehouses are full, and ports are bursting at the seams. It is in part in this context that the President is issuing an Executive Order that addresses shipping along with other industries.