FMC urges shipper-carrier collaboration
The Federal Maritime Commission said Wednesday it would orchestrate an ocean carrier-shipper working group to address container-shipping woes experienced by U.S. exporters and importers.
'The most effective long-term solutions to the commercial problems experienced by U.S. exporters and importers this year will be developed by ocean carriers working closely with their customers within a framework organized by the commission' the FMC said.
The commission's statement came as it accepted a final report and recommendations growing out of a fact-finding investigation into Vessel Capacity and Equipment Availability in the United States Export and Import Trades.
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The investigation, headed by Commissioner Rebecca F. Dye, was launched last March after growing numbers of complaints by importers and exporters about issues such as the unavailability of containers, cargo being rolled from one voyage to another, and demands for higher payments by carriers for cargo to be deemed 'loadable.'
The FMC called the year following the global recession 'one of the worst years in the 50-year history of international containerized shipping,' a year in which some analysts estimated that liner companies lost $20 billion.
Because information collected during the investigation was confidential, the entire report was not released. It included 170 interviews with what the agency said were “best-practices discussion pairs” between shippers and carriers, and Internet-based collaborative efforts concerning solutions to container availability.
Noting that 99 percent of the cargo carried in the U.S. transpacific trade is carried under service contracts, the FMC said 'recent tensions between ocean carriers and their customers resulting from vessel capacity and equipment shortages revealed a lack of mutual understanding between the parties regarding their contractual obligations.'
It said the FMC has adopted recommendations that would 'build on the relationships established during the investigation and are designed to engage ocean carriers and their customers in an intense effort to improve the U.S. international ocean shipping system.'
These include recommendations adopted earlier in the year to establish FMC 'rapid response teams' to try and help shippers and carriers resolve commercial disputes as well as efforts to more closely monitor the major carrier discussion agreements in the transpacific — the Transpacific Stabilization Agreement and Westbound Transpacific Stabilization Agreement — including reviewing transcripts of those meetings.
The FMC also said its staff would develop recommendations to enhance oversight of the three global alliances.
Another recommendation is for the FMC to form an “International Ocean Transportation Working Group” with ocean carriers, shippers and ocean transportation intermediaries as voluntary members. Initially four subcommittees will be formed that would develop:
' Carrier commercial practices, including those involving booking cancellations and rolling cargo.
' Shipper commercial practices, including forecasting improvement and minimum quantity estimates.
' Export capacity forecasting.
' Other ways to improve the shipper-carrier relationship, including collaboration on major supply chain changes.
The FMC said it would also form an “Intermodal Container Availability Working Group” that would collaborate with intermodal businesses such as railroads, ocean carriers, intermodal software providers, container lessors, and chassis pooling experts on container access and availability issues. The FMC worked with the Department of Agriculture to develop a pilot project to help agricultural exporters locate empty shipping containers.
The FMC also said it would develop an educational outreach project focused on helping small U.S. exporters and importers to improve their service contracting practices. The commission plans to develop a Web-based educational tool that may be used as part of outreach at commission area offices and other venues.
The FMC is encouraging the shipping public to contact its secretary to participate in the International Ocean Transportation Working Group or the International Container Availability Work Groups.
Dye thanked businesses to participated in the investigation. 'We look forward to their continued voluntary participation as we build on the collaborative work conducted under the fact finding to strengthen the business relationships between ocean carriers and their customers and increase supply chain reliability.”
Also on Wednesday the U.S. Senate Committee on Commerce, Science and Transportation favorably reported out President Obama’s reappointment of Dye as a commissioner. She been a member of the FMC since 2002.
The committee also voted in favor of the nomination of Mario Cordero to be commissioner. Cordero is an attorney and has been a member of the Board of Harbor Commissioners for the Port of Long Beach for seven years. ' Chris Dupin