FMC Requests More Funding for Enforcement, Expects Multiple OSRA Rules This Year

The Federal Maritime Commission is preparing for increased enforcement this year as it expects to receive more complaints and hire more investigators as part of a $43.7 million congressional funding request -- an uptick from the nearly $35 million it asked for last year.

In the FY 2024 budget request released last week, the FMC said it plans to hire “several new investigators and supervisors to ensure there is appropriate assignment of investigatory resources” for charge complaints and other “commission priorities." That includes a new “senior executive” to oversee its Bureau of Enforcement, Investigations and Compliance, saying the person will have “considerable experience in litigation and will oversee a complex portfolio of enforcement and compliance cases, resulting in additional benefits for the shipping public.”

The commission will also add a director and more lawyers for the BEIC’s Office of Enforcement, “substantially bolstering resources to enable more efficient legal action,” the FMC said. “The newly structured organization, with its additional resources, will substantially increase the effectiveness of the enforcement program.”

The commission also said it plans to use additional funding to hire another judge to aid with adjudicating cases, saying the number of cases before the Office of the Administrative Law Judges “increased markedly” between FY 2021 and FY 2022 because of the commission’s “focus on ocean shipping industry accountability.” As the FMC expands its enforcement capacity, it will continue to evaluate the resources required by the OALJ,” the FMC said, adding that it expects its caseload to continue increasing this year.

“Multiple docketed proceedings concerning detention and demurrage billing practices are before the ALJs,” the FMC said. “Given the length of time involved in these cases and the renewed focus on detention and demurrage in [Ocean Shipping Reform Act] 2022, the Commission expects continued activities in these areas.”

The commission’s plans to devote more resources to enforcement comes after a year in which it ordered carriers to issue about $700,000 in refunds as part of charge complaints brought before the FMC, the budget request said. Under the new complaint filing process established by OSRA, the FMC said it received about 200 total complaints of alleged violations last year, with 69 leading to an investigation and 30 leading to refunds.

The commission also touched on several ongoing and expected rulemakings, saying it expects to finalize its proposed rule on Carrier Automated Tariffs before the end of this fiscal year (see 2205090006). Trade groups warned the FMC that the proposed changes could place too heavy a burden on industry, especially a proposed change that would add more requirements to container documentation (see 2207110024).

The FMC also expects to finalize its proposed demurrage and detention billing requirements before the end of FY 2023 (see 2210070079 and 2203250028). The proposal was mostly supported by shippers -- who said new invoice requirements will bring more transparency to the industry -- but was panned by carriers (see 2212210058).

The commission is working on several “longer-term rulemakings” required by OSRA, including ones that could address the “processes for registration for shipping exchange registries and essential terms for service contracts.” The commission said “working groups have already begun researching and developing these proposed rules.”

The FMC also said it received “historic high numbers of service contract amendments” last year, including 90,000 in September, the “highest single month on record.” With this many filings, the FMC "cannot leverage the information contained in service contracts to determine whether this is driven by changes in fuel prices or major downward revisions in contract rates," the commission said. The FMC will propose adjustments to the required elements and filing formats of service contracts and increased staffing to help better analyze the information they are receiving from filings.