FMC Announces 8 Recommendations to Improve Supply Chain Congestion

On July 28, 2021, FMC Commissioner Rebecca Dye presented eight (8) interim recommendations to address supply chain congestion across the United States. The recommendations include the following:

Recommendation #1

Because many shippers, their agents, and contractors may be disinclined to file private party complaints or provide information to FMC investigators due to fears of retaliation, 46 U.S.C. § 41104(a)(3) should be amended to broaden the anti-retaliation provision so that it applies to all regulated entities and protects anyone who complains about potentially unlawful conduct to the FMC. Congress should also make clear that 46 U.S.C. § 41104(a)(3) is not limited to protecting competition among carriers, but also to protecting the ability of shippers and others to complain to the FMC about potentially unlawful conduct free from retaliatory fears.

Recommendation #2

Another potential disincentive to private party complaints is the cost of litigating against carriers or marine terminal operators, especially as compared to the amount of “actual injury” at issue. It might not make sense for a shipper to file a private party complaint to recover hundreds or thousands of dollars of unlawful demurrage or detention if it will cost significantly more to obtain a reparations award. Therefore, 46 U.S.C. § 41305(c) should be amended to authorize the FMC to order double reparations for violations of 46 U.S.C. § 41102(c).

Recommendation #3

The FMC should issue a policy statement on three areas related to private party complaints: (i) provide guidance on 46 U.S.C. § 41104(a)(3) (the current anti-retaliation prohibition) that the prohibition on retaliation by common carriers against shippers also extends to situations where the shipper brought a dispute to CADRS, commented on FMC rulemaking or participated in FMC investigations or enforcement efforts; (ii) provide guidance on the standard for recovering attorney fees in private party complaints, explaining that attorney fees will generally only be awarded where cases are frivolous, arguments are objectively unreasonable, or parties engage in bad faith or other vexatious litigation behavior; and, (iii) reiterate that any person may file a complaint alleging a Shipping Act violation, including shippers’ associations and trade associations.

Recommendation #4

Revise the FMC’s website to: (i) more clearly distinguish between the processes for providing information to BOE, requesting assistance from CADRS, and filing a small claims for or non-small-claims complaint; and (ii) make communications more intuitive for website visitors.

Recommendation #5

Hold a webinar to explain FMC processes.

Recommendation #6

Issue an ANPRM seeking industry views on whether the FMC should require common carriers and marine terminal operators to include certain minimum information on or with demurrage and detention billings and adhere to certain practices regarding the timing of demurrage and detention billings.

Recommendation #7

Amend 46 U.S.C. §§ 41109 and 41309 to authorize the FMC to order refund relief in addition to civil penalties in enforcement proceedings. Under the current statutory framework, in an enforcement proceeding, the FMC can assess a civil penalty for a violation of a prohibited act, and the penalty goes to the United States Government, not to the injured parties. Thus, an injured shipper or trucker who works with the FMC to investigate and prosecute unlawful conduct is not guaranteed any recovery for injury it may have suffered from the conduct. Granting the FMC the discretionary authority to order refunds in enforcement proceedings in addition to civil penalties, or in lieu of civil penalties, would incentivize parties to work with FMC investigatory staff.

Recommendation #8

Designate FMC staff to export-related issues. Export issues are similar, but not identical, to issues faced by U.S. importers. Not only would this export-focus allow CADRS to better handle exporter issues, but an export expert could help, along with the National Shipper Advisory Board, to keep other parts of the FMC apprised of issues particular to exports.

The Commissioner also announced that she plans to hold meetings in the near future with Supply Chain Innovation Teams in Memphis and the Port of Los Angeles to address container disruptions and increase supply chain visibility.