The Federal Maritime Commission has provided more insight into how it plans to keep ocean carriers from unreasonably refusing shippers vessel space, one of the provisions of the Ocean Shipping Reform Act of 2022 signed into law earlier this year.
The agency said Sept. 13 it is seeking public comment for a proposed rule that defines what would be considered an unreasonable refusal. The proposal also sets up the framework for cases in which the burden of proving an unreasonable refusal would shift from the shipper to the carrier.
Many ocean carriers were incentivized to leave the U.S. for Asia with shiploads of empty containers so they could be refilled with goods as quickly as possible amid high demand for imports. The moves would often come at the expense of agricultural producers, who were left unable to secure transportation for their exports.
“American exporters need our full support and commitment to promote an ocean transportation system that supports the growth of U.S. exports and the development of U.S. jobs,” FMC Commissioners Max Vekich and Carl Bentzel said in a statement. “We must do all that we can to fulfill this mission.”
The FMC will determine what constitutes an unreasonable refusal on a case-by-case basis, according to the proposed rule. A shipper must have made a good faith attempt to secure vessel space accommodations, which is “something more than one communication with no response or reply.”
Carriers will be unable to refuse space due to “commercial convenience alone,” according to the rule. It could also be considered unreasonable for carriers to prioritize certain shippers over others, or for carriers to refuse to respond to telephone or email requests from shippers over an extended period of time.
If a shipper’s complaint around unreasonable rejection of vessel space appears to meet FMC criteria, then the ocean carrier will be responsible for justifying why a refusal may have been reasonable. Still, the “ultimate burden of persuasion remains with the complainant to show that the refusal to deal or negotiate was unreasonable,” the rule says.
Stakeholders will have 30 days to submit comments to the proposal. The FMC is required to submit a final rule within six months of the enactment of the Ocean Shipping Reform Act.