Volume 25, Number 8
August 3, 2021
Oakland, California
SIGNALS™ provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry. For past issues, please consult our index.

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Signals™ Headlines - August 3, 2021

FMC Establishes Ocean Carrier Audit Program

The Federal Maritime Commission has established a new audit program and dedicated audit team to assess carrier compliance with the Agency’s rule on detention and demurrage as well as to provide additional information beneficial to the regular monitoring of the marketplace for ocean cargo services.

The new “Vessel-Operating Common Carrier Audit Program” was established July 19, 2021, at the direction of FMC Chairman Daniel B. Maffei and launched immediately. The Audit Program will analyze the top nine carriers by market share for compliance with the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices in the United States. The Commission will work with companies to address their application of the rule and clarify any questions or ambiguities. Information supplied by carriers may be used to establish industry best practices. Other focus areas of the audit process may include practices of companies related to billing, appeals procedures, penalties assessed by the lines, and any other restrictive practices.

“The Federal Maritime Commission is committed to making certain the law is followed and that shippers do not suffer from unfair disadvantages. The work of the audit team will enable the Commission to monitor trends in demurrage and detention practices and revenue, as well as to establish ongoing dialog between staff and carriers on challenges facing the supply chain. Of course, if the audit team uncovers prohibited activities, the Commission will take appropriate action. Furthermore, the information gathered by the audit process might lead to changes in FMC regulations and industry guidance if warranted,” said Chairman Maffei.

The Audit Program will begin with an information request establishing a database of quarterly reports allowing the Commission to assess how detention and demurrage is administered. Responses will be followed by individual interviews with the carriers. Lucille Marvin, the Commission’s Managing Director, will lead both the audit program and the audit team, which will initially be comprised of existing Commission employees.

Whitehouse Executive Order on Competition Requires FMC Action

Biden Administration’s recently issued Executive Order on Promoting Competition in the American Economy calls on the Federal Maritime Commission to vigorously enforce the Shipping Act’s prohibition against unjust and unreasonable practices relating to detention and demurrage and to consider further rulemaking to improve detention and demurrage practices and enforcement of related Shipping Act prohibitions. FMC Chairman Maffei attended the White House Signing Ceremony for this important Executive Order on July 9, 2021, and said he is committed “to doing all I can to have the Commission fully participate in this government-wide coordinated effort to benefit the U.S. economy.” Chairman Maffei said detention and demurrage charges are a top priority of the agency. The executive order also invites Chairman Maffei to participate on the newly established White House Competition Council which will coordinate, promote, and advance Federal Government efforts to address overconcentration, monopolization, and unfair competition in or directly affecting the American economy.

Transpacific Eastbound Carriers File GRIs Effective August 15 and September 1, 2021

Several leading carriers serving the TransPacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective August 15, 2021, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The August 15th GRIs will be the sixteenth GRI of 2021 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective August 15, 2021
Carrier
in USD, per 40ft ctr
CMA CGM
1000
COSCO (see note 1)
1000
Evergreen
1000
Hapag Lloyd
3000
HMM (see note 2)
1000 / 2000
ONE
1000
Yang Ming (see note 3)
1000 / 2000
ZIM
1000

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only.

NOTE 2: HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

NOTE 3: Yang Ming GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations US Inland Points via USWC/USEC, including IPI, Minilandbridge, Reverse IPI (IPI/MLB/RIPI). GRI amounts for all other container sizes are as per formula.

Several carriers have updated their tariffs to include new General Rate Increases (GRIs) effective September 1, 2021, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The September 1st GRIs will be the seventeenth GRI of 2021 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective September 1, 2021
Carrier
in USD, per 40ft ctr
CMA CGM
2000
COSCO (see note 1)
1000
Evergreen
1000
Hapag Lloyd
3000
HMM (see note 2)
1000 / 2000
ONE
1000
Yang Ming (see note 3)
1000 / 2000
ZIM
1000

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only.

NOTE 2: HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

NOTE 3: Yang Ming GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

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The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.
 
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