Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. regulator expects to find abuses in shipping amid supply chain woes

Published 11/02/2021, 06:50 PM
Updated 11/02/2021, 08:26 PM
© Reuters. Shipping containers are seen at the container terminal of the port of Oakland, California, U.S., October 28, 2021. REUTERS/Carlos Barria

© Reuters. Shipping containers are seen at the container terminal of the port of Oakland, California, U.S., October 28, 2021. REUTERS/Carlos Barria

WASHINGTON (Reuters) - The head of a U.S. commission that oversees ocean transportation said in an interview on Tuesday he suspects some ocean carriers have improperly charged importers, one of many factors driving supply chain woes.

A broad range of companies importing goods have been frustrated not only by the pile-up of ships outside harbors but also by higher shipping costs and fees for lapses many say are for problems outside their control.

U.S. Federal Maritime Commission Chairman Dan Maffei said the current mess is largely driven by a demand surge as the U.S. economy emerges from a coronavirus slowdown but added he expected the FMC (NYSE:FMC) would find some wrongdoing.

In August, Maffei said the commission had launched an inquiry in response to reports https://www.fmc.gov/commission-questions-shipping-lines-about-surcharges of ocean carriers improperly assessing fees.

"We need to do a very good and thorough job of investigating," Maffei told Reuters on Tuesday. "Of course, there's probably abuses going on. And, you know, I don't want to go farther than that."

In 2020, the FMC said importers should not be hit with demurrage or detention charges, which refer to fees charged when importers delay in picking up containers of goods and then returning them, if the delays are caused by circumstances beyond their control.

Noting one carrier charge was "value added", Maffei said, "What do they mean by value added? Are they going to gift wrap the metal container?"

The Travel Goods Association, whose companies do $1 billion in U.S. sales annually, pressed the FMC last week https://www.reuters.com/business/companies-us-shipping-regulator-enough-probes-start-enforcing-2021-10-27 for aggressive enforcement and said shipping costs were now eight to 10 times higher than last fall.

© Reuters. Shipping containers are seen at the container terminal of the port of Oakland, California, U.S., October 28, 2021. REUTERS/Carlos Barria

The demand surge has caused unprecedented bottlenecks in the supply chain which economists and businesses expect to persist into 2022.

The White House in a competition executive order issued July this year encouraged the commission to "vigorously enforce the prohibition of unjust and unreasonable practices in the context of detention and demurrage."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.