Watchdog warns Congress 'to do nothing at high rates'

The Federal Marime Commission (FMC), the US maritime watchdog, does not have the authority to limit the high tariffs in container liner shipping, but it does have the authority to put a stop to certain shipping surcharges. FMC Chairman Daniel B. Maffei said this during a hearing before the US Congress, where he came to defend his budget request for 2022.

We have the authority to address a major source of headaches for shippers and truckers: the unreasonable detention & demurrage fees," Maffei told Congress. The FMC cannot curb freight rates, he said, nor can the watchdog, for example, force shipping companies to charge equal rates to shippers large and small. Also, according to the chairman, the FMC cannot oblige the shipping companies to transport a certain minimum of American export cargo.

US President Joe Biden recently signed an Executive Order calling for an end to “unfair practices” in container liner shipping. Biden wants action against high costs in container transport and also wants to prevent container shipping companies from leaving American export cargo on the quay and sailing back to China with empty containers in order to quickly load more lucrative cargo there.

Maffei told Congressmen that this week he assigned a director of his organization to a project to check with all container shipping companies how they handle detention & demurrage surcharges and whether they are following the rules. The chairman called the FMC a ‘relatively small organisation’ that with 128 FTEs must keep international sea freight competitive and reliable, ‘a mission that is more important than ever’. The annual budget for which Maffei spoke in Congress is $30.8 million.