FMC Encourages Shippers to File Complaints Against Shipping Carriers

The Federal Maritime Commission updated its policies on Tuesday to make it easier for cargo owners to file complaints against ocean carriers for allegedly unfair and unreasonable business practices that result in financial or operational harm.

the new guidelines clarify that trade associations and shipping cooperatives can bring suits to protect individual businesses from potential retaliation, parties who file unsuccessful suits are not automatically required to pay the other party’s attorneys’ fees if the filing was made in good faith, and that the FMC will broadly interpret the anti-retaliation prohibitions in law.

The FMC said the new guidelines remove incentives for shippers to sue liner companies. Exporters told the agency they were reluctant to complain about excessive freight charges or canceled contracts for fear of retaliation.

The independent agency has stepped up scrutiny of the container shipping industry this year due to widespread congestion at ports, which many stakeholders say is made worse by carrier policies, such as release dates. return of containers not corresponding to ship arrivals.

The updated guidelines reiterate that transportation buying groups and trade associations can notify the FMC of suspected violations of shipping laws to insulate members from potential retaliation, such as failure to load containers for delivery.

“The Commission recognizes… that litigation has costs in terms of time, attention, money and relationships. And there may be instances where the cost-benefit analysis of an individual or a single company weighs against bringing an otherwise valid or potentially valid claim. This may be especially true if the amount of potential recovery is small relative to the cost of litigation or if the potential plaintiff has fewer resources, experience, or other leverage than the entity against which the claim would be made. brought,” he said in a policy statement.

In another guidance document, the FMC summarized the rules for claims to award attorneys’ fees to the prevailing party in litigation and emphasized that there is no presumption that a party will be reimbursed for his legal costs. The latest statement is designed to appease shippers, who have expressed concerns that liability for opponents’ attorney fees could deter them from filing lawsuits.

“Plaintiffs who raise non-frivolous claims in good faith, who plead diligently but properly and for proper purposes, and who comply with Commission orders run little risk of liability for attorneys’ fees. if they fail, absent unusual circumstances,” the agency mentioned.

Only once since 2014 has the FMC asked a failed plaintiff shipper to pay a defendant’s attorney fees.

The FMC issued a third statement emphasizing that it broadly defines who can file a retaliation complaint, as well as the types of sender activities that are protected by existing retaliation prohibitions.

Buyers of shipping services and their logistics providers have expressed frustration this year over carrier alliances that make it difficult to return containers to the same terminal they were picked up from, allowing truckers to make double trades for import loads and reduce costs. Other issues include inflexible return policies or reluctance to accept empty containers, as well as high surcharges for late container pickup and return when terminals limit appointments and deliveries.

The FMC is currently auditing nine major container lines to determine whether they are taking advantage of tight market conditions to overcharge shippers on so-called detention and demurrage.

The United States House of Representatives recently passed legislation that would strengthen enforcement of the container shipping industry. Key provisions would impose minimum requirements on shipping carrier service contracts, shift the burden of proof in regulatory procedures from shippers to container lines, and require carriers to accept exported goods if they can be safely loaded into a reasonable time.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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