FMC Considers Invoking Emergency Powers to Alleviate Port Congestion

The Federal Maritime Commission is considering invoking its newly granted emergency powers under the 2022 reform of the Ocean Shipping Act to require data sharing among terminals, truckers, carriers, and other parts of the shipping industry. The commission said it would consider if data sharing would help to alleviate the persistent challenges of port congestion as the Department of Transportation earlier in the week said that its initiative to increase the flow of data across the supply chain was helping to address challenges.

“The Ocean Shipping Reform Act of 2022 authorizes the Federal Maritime Commission to issue such an emergency order after seeking comments from the trade,” they said in announcing the beginning of a 30-day comment period. “If the commission issues an emergency order, common carriers and MTOs would be required to share directly with relevant shippers, rail carriers, or motor carriers information relating to cargo throughput and availability.”

The commission noted that despite efforts during the pandemic, pockets of congestion persist. They acknowledged that key metrics such as the total number of containers on ships waiting offshore, average wait time for a berth, and dwell time have all improved in recent months at major ports. However, the FMC highlights that efforts to reduce congestion at one port often result in increases at neighboring ports.

AIS data showing the vessels waiting offshore confirms that the congestion has shifted away from some of the ports that had experienced the long delays. For example, on August 12 the Marine Exchange of Southern California said that just a dozen containerships are heading to the ports of Los Angeles and Long Beach. Two containerships were in the anchorage while 10 were registered and traveling across the Pacific, which is down by 97 vessels from the record in January 2022. 

Reports, however, have highlighted in recent months how congestion has grown at U.S. East Coast ports. Currently, the AIS signals appear to show approximately 35 container and cargo ships waiting at both Charleston and Savannah with more than a dozen offshore for the Port of New York and in the anchorage leading to Baltimore and the ports in the Newport News-Hampton Roads area.

Waiting times at the terminals have grown so severe at the Port of Baltimore that truckers staged a protest at the end of the week. They complained of waits up to eight hours, especially when returning empties to the yard. The port operator blames the congestion in the supply chain and the surge in container volumes passing through the port.

Before evoking an emergency order the FMC will consider three factors. They will explore if the magnitude of the congestion is having an adverse effect on the competitiveness and reliability of international ocean transport and if an emergency order would help to alleviate the situation. They are also seeking comment on the scope of the order if the commission determines it would help with the current congestion.

The Department of Transportation last week held a meeting of its Freight Logistics Optimization Works (FLOW) partnership which they said now numbers 36 participants from the carriers to terminals, shippers, and truckers. One of the key initiatives of the working group is the sharing of data among the partners and with DOT to identify and manage problems along the supply chain. They called the sharing of data an important milestone that DOT believes is helping with the supply chain disruptions.

The FMC was given the authority to issue emergency orders for the first 18 months after the passage of the new legislation, which became law in late June. Congress gave the commission the authority as a tool to address congestion and its concerns over how that was impacting exports. The provision gives the FMC the authority to create an emergency order lasting up to 60-days but they could renew the order with the unanimous agreement of the commissioners.

This is the latest in a series of actions taken by the FMC since the passage of the legislation. Congress gave the FMC both a to-do list and a timeline for its actions. The FMC highlights that it is meeting these requirements including alerting the industry to provisions including the changes to the detention and demurrage billing practices. They have also established an interim procedure for submitting complaints as well as establishing a new structure and setting priorities for enforcement.