Biden issues Executive Order to beef up competition in key industries

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

Ocean carriers, rails targeted for stronger regulation 

President Biden issued a broad Executive Order on Friday, July 9, calling on federal agencies to strengthen oversight and enforcement of regulations to maintain market competition and prevent unfair monopolistic practices.  

The order identified 72 initiatives by more than 12 agencies to promote competition. Ocean container carriers and railroads, so vital for ag shippers, along with big tech, occupied center stage for the effort. 

The specific details and language in the order will shed light on how extensive the Executive Order will yield actions. Following are reports from industry media: 

FMC welcomes ‘crackdown’ on ocean carriers 

Federal Maritime Commission (FMC) Chairman Dan Maffei said he welcomed the Executive Order’s call for the Justice Department to collaborate with the FMC to investigate the global ocean carrier sector and possibly issues fines for uncompetitive practices and pricing. 

Some 85% of ocean container shipping is now controlled by about 10 major ocean container lines – none of them American-owned – which operate in just three vessel-sharing alliances. The order encourages FMC to use vigorous enforcement of rules to preserve competition. It’s also worth noting that exorbitant container rates are beginning to get examined by the European Union. 

Maffei told Freightwaves, while the FMC is an independent agency and therefore not technically subject to presidential executive orders, he “very much intend(s) to cooperate with it. The President is saying all hands on deck, which we appreciate.” 

Maffei also noted that excessive detention and demurrage penalty fees currently “is a huge issue we’re working on, and it’s important to get to the bottom of it because it’s unfair to shippers. If those practices are abused it tends to decrease capacity, which makes things worse.” 

The World Shipping Council, which represents 90% of the ocean carrier trade, disputes the charges of uncompetitive practices and says the current disruptions to supply chains are the result of historic increases in demand for imported consumer goods. 

STB ordered to examine rail competition 

It remains to be seen how the U.S. Surface Transportation Board (STB) tackles the Executive Order’s charge to increase competition and resist further monopolization in the railroad sector. The order did, however, identify areas the Biden Administration sees as key steps including: 

  • Beginning rulemaking, or reup an earlier STB proceeding, to encourage “reciprocal switching,” which would strengthen the ability of captive shippers to have access to more than one railroad and more competitive pricing. 
  • Consideration of other rulemakings related to competitive access, including bottleneck rates and interchange commitments. 
  • Ensuring that future mergers and acquisitions are examined with the public interest in mind. 
  • Stronger enforcement of on-time performance requirements and assurance that passenger rail service on freight rails is not subject to unwarranted delays or interruptions. 

STB Chairman Marty Oberman said the board has been actively looking at the issues identified in the Order, and he would urge board members to prioritize issues related to competitive access, and practical rate relief options. 

Freightwaves has more detailed coverage of the Executive Order on rail issues. 

Meanwhile, Bloomberg Businessweek Economics Editor Peter Coy says, “There’s a good reason Biden singled out railroads for criticism.” He notes the STB itself has warned that consolidation in the railroad industry had “created the potential for monopolistic pricing.” 

In other transportation news … 

Drewry forecasts huge profits for container lines  

Last week, one of the world’s most-recognized, leading maritime consulting agencies, UK-based Drewry, issued a forecast that global ocean container lines are on track to achieve an eye-popping $80 billion in annual collective profits in 2021, and they could reach $100 billion for the first time in history. 

That forecast is up a whopping increase from Drewry’s forecast of earnings before interest and taxes (EBIT) made in March, Maritime Magazine reports. 

“Even if carriers do refer to type and the current newbuild (of new container ships) craze ends the upcycle in 2023, they will have made so much money between 2020 and 2023 that they will be set up for years to come,” Drewry noted in its Container Weekly report. 

More details in Maritime Magazine and Container News. 

Wildfires disrupt rail, port services 

The Port of Vancouver, B.C., has issued several operational updates over recent days to inform the shipping community and stakeholders about the changing status of rail service by both Canadian Pacific (CP) and Canadian National (CN) from inland Canada and the Midwest U.S. to the busy container port. 

Wildfires in the Pacific Northwest – particularly in the British Columbia interior between Kamloops and Boston Bar and North Bend – have caused the railroads to pause service for periods of time while they check out the safety status of the tracks and rail corridors. The Canadian Ministry of Transport has issued precautionary safety measures. 

The breaks in rail traffic flow have contributed to more container ships at anchorage off the port near or above capacity. Vessels in port can be viewed at the PortVan eHub app that can be downloaded here.   

Container ships often call at Vancouver before making their next stops at the Northwest Seaport Alliance ports of Seattle and Tacoma. Delays can impact transit times from each of the ports.

Transportation Roundup: Bipartisan bill would require ocean carriers to accept U.S. container exports

Legislation now being drafted by two key members of the U.S. House Transportation and Infrastructure Committee (House T&I) aims to strengthen the ability of the U.S. Federal Maritime Commission’s (FMC) to enforce its oversight of the maritime ocean container shipping system.   

Representatives John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.), chairman and minority leader, respectively, of the House T&I’s Coast Guard and Maritime Subcommittee, are proposing a bill that is largely in response to complaints from agriculture exporters about chaotic supply chain problems they face in serving overseas markets due to ocean carrier practices. 

The legislative proposal reportedly will call for amending the U.S. Ocean Shipping Act to: 

  1. Strengthen the FMC’s ability to enforce its guidelines for ocean carriers’ use of detention and demurrage per diem penalties. 
  1.  Bar ocean carriers from refusing to handle export bookings.     

These two issues have been the central complaints of agricultural shippers, including the Specialty Soya and Grains Alliance and Agriculture Transportation Coalition in particular, but also of other U.S. container exporters and importers. 

The legislation reportedly will call for increased funding for FMC’s Consumer Affairs and Dispute Resolution (CADRS) service to have the resources to conduct stronger oversight.  

More coverage can be found in Freightwaves and the Journal of Commerce. 

A hearing held June 15 by the House T&I Subcommittee on the Impact of Shipping Container Shortages, Delays and Increased Demand on the North American Supply Chain focused on the FMC’s efforts to address the current shipping supply chain crisis. You can watch a video recording of the hearing by clicking here. 

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

Transportation Roundup: Western railroads battle capacity

For weeks, if not months, exporter shipper members of the Specialty Soya and Grains Alliance have been struggling with increasing congestion, rail and trucking delays, and shortage of truckers – all stemming from capacity limits at the inland container rail yards, notably at Chicago’s and Kansas City’s main intermodal yards.    

A report this week from the Journal of Commerce (JOC) shared what the two main western Class 1 railroads are doing to try to alleviate the situation at BNSF’s Logistics Park and Union Pacific’s Global IV terminals in Chicago.   

Inland intermodal traffic has climbed between April 4 and May 30 by 26% for UP, and by 8.4% for BNSF.  BNSF’s Tom Williams told JOC while the different stakeholders – trucking companies, importers, marine terminal operators – are focused on their own operations and needs, they may not have “a good perspective of the entire supply chain dynamic.” 

“We desperately want to free up cars to get back to the ports,” he said. “And I’m not trying to point fingers because this is a global supply chain challenge.” 

Surface transportation bill 

The U.S. House Transportation and Infrastructure Committee last week introduced a $547 billion surface transportation reauthorization bill. A mark-up of the legislation was scheduled for June 9. This version of the Highway Bill is similar to H.R. 2 introduced last year. It calls for a 79% increase over current funding levels. 

Of interest to ag transportation, there is a provision authorizing a 10% per axle weight tolerance for dry bulk freight, which would benefit truckers and container drayers with bulk-loaded grain that can shift some when braking or going over bumps. 

There are also some study and data collection provisions that will look into freight transportation fees and per-mile user fees (potential alternatives to raising gas taxes), driver detention time, hours of service and more. Click here for a link to a fact sheet from the committee on the bill. 

This is not to be confused with the big overall infrastructure investment proposals that are under discussions in Washington, although it could become a part of a big omnibus package. The surface transportation bill will need to be reauthorized.   

If you think you’re having a bad day …  

Be glad you weren’t one of the people in charge of berthing an OOCL container ship at Taiwan’s busy Kaohsiung port last Thursday. Click here to see what can happen when a container ship – even a modest-sized, unladen one – taps a docked loaded one during the delicate berthing process. 

American Shipper reported that just one worker who was operating the destroyed gantry crane was injured. Port of Kaohsiung officials said he suffered a cut to the arm. Two crane maintenance workers were temporarily trapped but were said to have been rescued unharmed.  

South Korea’s Port of Busan experienced a similar accident last year when the Milano Bridge vessel came into berth with a bit too much momentum and collided with another container ship. 

These are reminders of the dangers and incredible scale of the transportation systems employed in the worldwide container shipping system. Both Kaohsiung and Busan are key ports frequently used by SSGA member exporters in reaching customers across Asia. 

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation 

Competitive Shipping Roundup: Inland container rail ramp congestion squeezes trucking availability

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation 

Trucking congestion at key inland rail container ramps is now perhaps the largest impediment to moving more container freight overseas for U.S. exporters. The latest bottlenecks in the chaotic global container shipping supply chains have been moving inland as the import surge continues, with the fall peak season on the horizon. 

“U.S. drayage drivers quitting as rail ramp congestion crimps pay” the title of a report last week in the Journal of Commerce (JOC). Despite increases in rates and driver pay from trucking companies, drayage providers in Chicago, Cleveland, Columbus, Dallas, Kansas City and Memphis have seen as much as one-quarter of their drivers quit because of their decline in income,” JOC reported.    

That bears out exactly what Specialty Soya and Grain Alliance has been hearing of late from several of its exporter shipper members.   

“Members tell us they are facing ever more difficulty finding trucking. Some tell us they’ve lost regular, dependable dray drivers because they are shifting to hauling other freight,” said Bruce Abbe, SSGA advisor for transportation and trade. “If you have a good driver hang on to him or her.” 

Drivers report its common now to have to wait in lines two hours to pick up or ingate a container – even up to six hours – at key Chicago yards including BNSF Logistics Park and UP Global IV. Trucking is hard to come by at Kansas City and elsewhere due to chassis shortages as well. Container dray drivers get paid by the trip, and the congestion delays have reduced the number of trips drivers can make in a day. 

CN gains upper hand in tug-of-war for Kansas City Southern 

Although it’s not final, Canadian National (CN) railroad seems to have moved ahead of its Canadian competitor Canadian Pacific (CP) railroad in the competition to acquire Kansas City Southern (KCS) railroad. The KCS board on May 21 determined a revised offer from CN was a “company superior proposal” and signaled its intent to move forward with the CN merger agreement.  

The Class One railroad merger still needs to run the course under U.S. Surface Transportation Board proceedings, and CP may continue to press it’s earlier offer that was initially accepted by KCS. 

 Go here for more details from Railway Age. 

Relentless online boom continues to disrupt global shipping  

If there is any doubt the current surge in container shipping demand, driving rates ever higher and reliability of service ever lower is a global crisis, a lengthy report in AsiaNikkei.com on May 19 should settle any doubt. 

“This is uncharted territory in terms of carrier profits – in terms of freight rates, in terms of just the level of disruption that the supply chain is seeing,” Simon Heaney, Drewry’s Long-based senior manager for container research said in the report, an interesting read about the scale and diverse impact of the global container shipping crunch, from seafarers to freight forwarders to shippers. The disruption is at a level beyond anything Heaney has seen over a 20year career. 

Competitive Shipping Roundup: New FMC chair Maffei calls for review of Shipping Act

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation 

The newly appointed chairman of the Federal Maritime Commission (FMC) last week told a major shipping industry trade group that it’s time for a review of the U.S. Shipping Act’s laws and regulations. 

FMC Chair Daniel Maffei, speaking to the National Customs Brokers and Forwarders Association of America, said the last significant reform of the shipping laws was nearly 23 years ago, and key provisions date back to 1984. 

The shipping environment has significantly changed since those times, Maffei said, as the number of major ocean carriers has gone from more than 20 down to about nine. No major carrier is domiciled in the U.S., yet container shipping volume on the high seas has tripled. 

In light of the current, unprecedented surge in imports, skyrocketing rates and nearly unmanageable congestion in supply chains, Maffei said a review of the U.S. shipping act by Congress is in order. 

SSGA and the Agriculture Transportation Coalition have been among groups that have urged Congressional consideration of reforms to the Shipping Act to strengthen the FMC’s review and enforcement powers, as well as requirements upon the ocean carriers to provide full and fair service to U.S. exporters. 

Click here to view the full story in Container News. 

Maritime industry analyst: Brace for two years of high rates 

During a major container shipping outlook webinar last week by the prominent, London-based, global shipping consulting firm Drewry, shippers were advised to prepare to see higher freight rates and tight capacity for at least two more years. 

A Drewry executive said some relaxing of freight rates was seen for 2022, but ocean carriers are still expected to keep rates high, thanks to the capacity management capability they achieved during the pandemic and the “pricing discipline they have shown, Loadstar reported. 

The consultancy predicted a blend of spot rates, contract rates, backhaul and regional rates will increase 23% this year, with some headhaul rates “substantially higher. 

Ocean carriers log unprecedented profits 

While shippers are struggling with poor service and unprecedented congestion at ports globally and at inland container rail terminals in the U.S., the ocean carriers at the center of the supply chains are reporting unprecedented levels of profits, thanks to a continued surge in imports and high rates. 

Last week, A.P. Moller-Maersk reported a first-quarter profit of $2.7 billion. That was a record quarterly return for the largest ocean carrier and just shy of its full yearly profit of 2020.     

Cosco Shipping Holdings, the parent company that owns Cosco Shipping Line and Orient Ocean Container Line, reported it earned $2.39 billion for the first quarter of 2021, that was up a whopping $2.33 billion over the first quarter of 2020.   

Ocean Network Express earlier reported a net profit of $3.48 billion for its fiscal year that ended March 31. The ocean carrier was formed in 2017 through the merger of the container shipping divisions of Japanese conglomerates NYK, Mitsui OSK Line and Kawasaki “K Line.” 

How long the current global container congestion crisis will last is subject of much debate. The Drewry analyst above noted the ocean carriers have signed contracts for 170 new build ships during the first three months of the year. However, the majority won’t be delivered until 2023, on top of other existing orders. 

Lars Jensen, CEO of another major consulting firm Vespucci Maritime, told a webinar in late April that the shortage of capacity and equipment was mainly caused by congestion in the U.S., exacerbated by the temporary Suez Canal blockage. He termed it a “temporary shortage.”   

“In 2019 there were enough vessels and containers in the world, but in 2020, when we moved less cargo than in 2019, there were all these shortages, he said. The “physical number of containers or ships” are not the problem, he argued. Rather, it’s a need to rebalance the market after getting rid of the congestion bottlenecks.” 

Empties also leaving East Coast ports 

While U.S. ag exporters continue to fret that their freight keeps getting way laid at the ports or their bookings denied or delayed as the ocean carriers favor shipping empty containers back to China, the issue is not just a problem seen at the West Coast ports serving the Trans Pacific trade. 

The Port of New York and New Jersey reported in March empty returns of containers climbed by 77.5% in March compared to a year earlier, amounting to 267,542 TEUs. Imports were also up 44.%, at 393,159 compared to 271,511 in March of last year.  Exports dropped 7.4%, down to 126,699 compared to 136,780 a year ago.

‘We need action now’: Ag exporters seek remedy for shipping crisis

300 ag groups, companies sign letter to transportation secretary

As the container shipping crisis continues its crippling effect on U.S. exporters, the Specialty Soya and Grains Alliance (SSGA) joined nearly 300 agricultural and forest product associations and companies – including several SSGA members – this week in signing on to a letter to Transportation Secretary Pete Buttigieg, urging immediate intervention to remedy the situation.

“We need action now,” the letter states, “not additional studies.”

SSGA agrees, as U.S. exporters and their access to foreign markets must be protected.

The letter requests that the Department of Transportation assist the Federal Maritime Commission (FMC) “in expediting its enforcement options” and “consider its existing authorities” to determine how it can assist U.S. exporters and the ag producers they serve in their transportation needs.

For more than six months, U.S. ag exporters, including SSGA members who supply Identity Preserved (IP) soya and specialty grains for food manufacture, have suffered under unreasonable practices by ocean carriers. These practices include the declining of U.S. agricultural and other exports in favor of sending empty containers back overseas in order to keep up with the massive demand for consumer imports.

The imbalance has caused congestion, delays and even cancelation at the ports, and carriers have failed to provide accurate notice of arrival, departure and loading times. Carriers have also imposed unreasonable, punitive financial penalties on exporters, who, through no fault of their own, have missed loading windows. This is in violation of detention and demurrage guidelines set forth by the FMC. SSGA and other associations have previously supported FMC’s investigation into these practices.

It has been estimated that $1.5 billion in ag exports has been lost during this crisis, which has come on the heels of a pandemic that has also severely injured the market.

With no sign of the crisis letting up in the immediate future, SSGA is hopeful that Secretary Buttigieg will act upon this increasingly dire situation. Our members, allies and partners at the Agriculture Transportation Coalition have specific measures to propose and are requesting the opportunity to present them.

Copies of the letter were also sent to Agriculture Secretary Tom Vilsack and leadership of the Senate and House transportation committees. The letter can be found here.

Competitive Shipping: Container, booking problems persist

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation 

There seems to be little, if any, let-up in the extraordinary imbalance of global container flow and supply chain congestion. The crisis, which is more than six months long and running, has constricted the export capabilities of U.S. agriculture container shippers to a trickle. In fact, some market analysts saying “the worst may yet be to come. 

Here is a roundup of the latest transportation news: 

The maritime ocean carriers control and govern the flow of containers. Everincreasing demand for durable goods made in Asia and imported to North America keeps driving up rates for the eastbound Trans Pacific. The shortage of available containers in Asia is driving carriers to continue to ship empties back “neglecting (the needs) of U.S. exporters.” 

Maritime Market Expert Henry Byers was quoted about the surge in empties and what it signals for shippers, “It’s time to sound the alarms,” maritime market expert Henry Byers said in the storyThe shortage of container capacity is already affecting many supply chains, but almost no company will be spared from what lies ahead.” 

  • Asian container availability is tightening, and the purchase and rental costs of the steep shipping boxes are soaring, according to the ContainerXChange online data platform, the Journal of Commerce reported last week. The container ocean lines “warn that equipment will become even scarcer in the eastbound Trans Pacific as demand builds through May.” Delayed impact of the Suez Canal closure is apparently still affecting the system, causing experts to predict transportation markets and equipment availability will tighten further in the coming weeks. 
  • Import retailers and ocean carriers are beginning to shift some of their import volumes to ports than the congested southern California ports of Los Angeles and Long Beach. Oakland, the Northwest Seaport Alliance, New York/New Jersey and Savannah are seeing some gains. Yet all of the major ports are experiencing some degree of operational issues, JOC reported. Maersk and Mediterranean Shipping Company (MSC) are among carriers making shifts in their service routings.  

Blockbuster ocean carrier earnings, contract rate increases getting reported 

  • While their customers are facing unprecedented equipment shortages and high rates, the ocean carriers are reporting unprecedented profits, after years of losing money due to what until recently was over-capacity. 

Hong Kong-headquartered carrier OOCL reported “spectacular” increases in volume and revenue last week for the first quarter 2021, according to Loadstar. Average revenue per container increased 58.3% year-over-year. A 28.3% increase in volumes led to a provisional firstquarter revenue total of $3 billion, up 96% from the same period in 2020which, it should be noted, was the start of the pandemic and a series of reduced sailings by the carriers. Revenue from the Trans Pacific rose 84.9%, just topping $1 billion. 

  • It should not go unnoticed that the tightening container availability and capacity forecast for May are happening at the key time when beneficial cargo owning shippers and freight forwarders are renegotiating contracts for the coming year. Container-News.com reports some shippers are paying double and up to three times as much as last year in rate increases on major trade lanes. 

CN takes on CP in competition to acquire KCS 

Canadian Pacific Railway’s recent surprise announcement of a public offer to buy fellow class one railroad Kansas City Southern (KCS), and expand its network connections to take advantage of the U.S./Canada/Mexico trade agreement certainly caught the eye of CP’s erstwhile northern competitor Canadian National Railway Company (CN). 

Last week, CN President and CEO J.J. Ruest sent a public offer to KCS President and CEO Pat Ottensmeyer and the KCS board offering to match the CP offer “Letter for Letter,” according to Railway Age.  CN has also submitted a “pre-file” of its offer with the U.S. Surface Transportation Board (STB) for consideration. The STB will be examining the proposed acquisition for anti-competitive and service consideration for the market. 

No let-up in container import demand surge

Stress to transportation supply chains through end of summer

Compiled by Bruce Abbe, SSGA Strategic Advisor for Trade and Transportation

Inland U.S. ag container exporters are anxiously waiting for a breather from the disruptions caused by the demand surge for containershipped import products that has led to limited access to containers for shipping food products to locations other than China. Indications now are signaling no letup in the foreseeable future.    

According to research by PanjivaU.S. seaborne imports of containerized freight increased by 50.5% year over year in March and by 36.9% when compared to March 2019, resulting in a record 3.02 million TEUs (20-foot-equivalent units) shipped, or 97,300 per day. Consumer demand continues to be the main driver of this growth. For instance, Panjiva reports leisure products and home furnishings climbed 94.9% and 91.4% this March compared to March 2019. 

Also: 

  • In March, the always busy Port of Long Beach set an alltime record for the number of containers handled at its terminals. Long Beach reported 840,387 TEUs were handled in March, up from the previous record of 815,885 set in December. March is normally a slower month. For the first quarter of 2021, the Port of Long Beach handled 2.4 million TEUs. The total number of empty containers, including outbound empty containers (270,016 TEUs) also were all-time highs for the port, according to Freightwaves. On the east coast, the Port of Charleston, S.C., also reported record volume of containers in March.    
  • Further, the National Retail Federation told the Journal of Commerce that its member retailers see no let-up in their ordering surge through the end of the summer. NRF projected imports to remain at record or near record levels through August.  That demand is reportedly being driven by the need to restore their inventories-to-sales ratio level that is near a 30-year low. The fall back-to-school and late fall/early winter holiday high demand seasons follow right behind. 
  • The container shortages felt throughout the global system took a further jolt from the recent six-day blockage of the Suez Canal. Ocean carriers reportedly warned that there will be a deeper shortage of containers available in China, particularly 40-foot units, in the coming weeks. Those shortages could further spike spot rates in China for its export manufactured goods heading to the West.  

Industry experts, including SSGA logistics members, say these projected trends, coupled with current pandemic-driven constraints and backlogs on the ocean/ports/rail systems, could last throughout much of the rest of the year. Exporters will need to continue to explore all creative options for accessing containers and ship space. 

STB adopts final rule on Class 1 rail demurrage billing

Compiled by Bruce Abbe, SSGA Strategic Advisor for Trade and Transportation

While many Specialty Soya and Grains Alliance (SSGA) member shippers would like to see stronger federal regulation of the ocean container carriers and terminals to prevent abuses when it comes to demurrage and detention penalties, they may find a small bit of encouragement from a new federal rail regulation step. 

Last week the U.S. Surface Transportation Board (STB) adopted a final rule that requires Class I railroads to include certain minimum information on or with demurrage invoices and provide machine-readable access to that information. The minimum information includes such things as billing cycle, shipment, care placement, credit and debit information and more. The STB announcement said the aim is to improve “the ability of rail users to review and verify the accuracy of demurrage changes and facilitate the resolution of disputes between railroads and their customers. 

It’s hardly a revolutionary change, and Class II and Class III rail carriers are not subject to the rule.    

When announcing the rule, the STB stated that demurrageif properly handledserves as an incentive to prevent undue rail car detention and thereby encourages efficient use of rail cars in the rail network. 

The National Grain and Feed Association and other associations pushed the STB to create guidelines that ensure such rail penalty charges are commercially fair, practical and commercially reciprocal in nature. The STB, however, did not include guidelines for demurrage and accessorial charges and practices in the final rule. It only addressed minimum information requirements. 

Click here for the announcement from the STB, and here for coverage in Railway Age. 

The Federal Maritime Commission (FMC), which regulates ocean shipping practices at ports and terminals in the U.S., adopted and released “interpretive rule” guidelines for detention and demurrage last summer after a year-and-a-half long study that sought input from all parties. The interpretive rule basically lays out how the FMC will look at disputed detention and demurrage charges applied to shippers and truckers. FMC will look at the appropriateness of such per diem charges based on if they are appropriate to make the transportation flow more efficient.     

Shipper groups and some policy makers, however, have been disappointed that over the past year during the disruptive pandemic-driven congestion crisis and the ensuing import surge that the FMC’s interpretive guidelines have shown minimal results in reforming ocean carrier behavior. SSGA and other ag shipper groups would like to see stronger enforcement steps on ocean carrier and terminal practices to prevent unfair or misapplied per diem penalties on shippers for delays they had no control over. 

Maffei designated FMC chair

The Specialty Soya and Grains Alliance congratulates Daniel Maffei, who was designated chair of the Federal Maritime Commission by President Biden on Monday.

Maffei, a native New Yorker who served two terms in the U.S. House of Representative as well as in the Department of Commerce for the Obama Administration, has served on the FMC as a commissioner since 2016.

“We commend the appointment of Daniel Maffei to FMC chair,” said SSGA Executive Director Eric Wenberg. “He is excellently suited for this position. He understands the trade issues we are facing amid the current container shipping crisis and the regulatory response needed to reduce the shocks to the supply system.”

Maffei co-authored a letter to the World Shipping Council regarding U.S. exporters concerns about cargo being refused by major ocean carriers and how that could be a violation of the Shipping Act. Those discriminatory practices were first brought to the public’s attention in October. Maffei has also supported the FMC’s investigation into detention and demurrage practices by ocean carriers.

In a statement released Tuesday, Maffei said this is a “critical time for our nation’s supply chain. Due to the effects of COVID-19 and an unprecedented import boom, we are dealing with serious challenges to America’s international ocean transportation system – challenges that the FMC has a vital role in addressing, both on its own as an independent agency and in cooperation with other agencies.”

Maffei replaces Michael Khouri as FMC chair.