FMC’s Bentzel Responds to Chemical Industry Shippers’ Complaints

The U.S. Federal Maritime Commission has reported receiving a growing number of complaints from a wide range of shippers regarding a broad range of issues ranging from denial of service to systematic policies making it difficult t maintain the flow of goods. FMC Commissioner Carl Bentzel is now reporting that during a recent meeting with chemical distributors they voiced similar concerns about systemic reductions for hazardous materials transportation by the shipping industry.

The complaints coming from the chemical industry were concerning to commissioner Bentzel expressed his personal concerns about the availability of ocean shipping to the chemical supply chain and U.S. manufacturers. The FMC has already launched an audit program after repeated complaints coming from a range of shippers including consumer goods companies, trade associations, and agricultural interests that all told the FMC that the policies of the container carriers are creating increasing problems for U.S. industry.

“I am troubled by reports that ocean carriers might be refusing to serve shippers importing hazardous materials,” said Bentzel. “The inability to import these commodities could in turn harm U.S. manufacturers, and potentially jeopardize U.S. programs related to water purification and other strategic U.S. services and commodities that rely on the movement of international cargoes of hazardous materials.”

The industry highlighted to the FMC during its meeting that distributors source chemical products from manufacturers overseas and sell them to diverse customers in the United States. They reported that they supply industries that use these chemicals to produce a wide range of goods critical to the economy and public health. Many of these chemical products are no longer domestically manufactured but are essential components of programs and products used by U.S. consumers daily.

Bentzel noted that he recognizes the fundamental challenges of addressing supply and demand in the congested intermodal transportation environment and that the current surge in imports has continued to stretch the abilities of the ocean liner industry. However, the regulations prohibit carriers from unreasonable refusals to deal and to establish, observe and enforce just and reasonable practices regarding receiving and delivering shipments. The rules seek to ensure that hazardous material cargoes are not discriminated against because of the nature of the material being shipped.

“Given the potential implications of systemic refusals by shipping lines, I am urging that we broaden the scope of the Vessel-Operating Common Carrier Audit Program to include a review of whether there have been any systemic decisions by ocean carriers to discriminate against hazardous materials transportation,” said Bentzel. Such a review he noted could be conducted within the existing audit program and would make FMC oversight more focused and thorough during this volatile time.

The FMC in July established a new audit program focusing initially on the nine largest ocean carriers along with a dedicated audit team to assess carrier compliance with the rule on detention and demurrage. The audit program, which is analyzing the top nine carriers by market share for compliance with the FMC’s rules, was launched in response to the complaints of shippers over increasing problems as the rate of imports surged in 2020 and 2021.