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Top US maritime regulator wants to strengthen enforcement

Taking the helm amid a stressed container shipping system, the new chairman of the Federal Maritime Commission (FMC) wants to strengthen the agency’s enforcement and take stronger action on so-called unreasonable detention and demurrage.

Daniel Maffei, who President Joe Biden tapped to lead the regulator in late March, said there’s a need for him and his four fellow commissioners to give the FMC’s Bureau of Enforcement “strong and unified guidance.” In an interview with JOC.com, Maffei said there had sometimes been a lack of consensus on enforcement priorities when the commission was chaired by Michael Khouri during the Trump administration, which encouraged deregulation.

The last time the agency announced civil penalties was in July and February of 2018. Comparatively, in 2015, during the Obama administration, the FMC announced four separate penalties. Now that there are five commissioners confirmed, unlike in years past when there were only three, and new staff, Maffei wants the commission members to assess their shared priorities and give clear instruction to enforcement staff.

“With the size of our staff, we are not going to catch everybody, and we may only catch a fraction of (violations). However, I believe if we can establish the right type of deterrent effect showing that these practices won’t be tolerated, it will have a positive rippling impact,” Maffei said. “If I have to go to Congress for more funding for enforcement, I will.”

Although the agency formalized an interpretive ruling regarding detention and demurrage in April 2020 to give clearer guidance on when the fees should be levied, Maffei said he’s concerned that the industry isn’t fully heeding the FMC’s warning that such fees should encourage the pickup of import containers and return of empties, rather than be revenue generators. US port congestion over the last eight months has only made the long-running issue on when detention and demurrage charges are unreasonable more emotional for importers and exporters as they shell out tens of millions of dollars for storage penalties.
“I’m interested in putting some teeth behind (the interpretive rulemaking) and creating better processes to make sure it’s complied (with),” he said. “There has clearly been abuse.”

Maffei stressed that the storage fees for when shippers and consignees don’t pick up containers from terminals on-time or are late returning containers are needed to incentivize the flow of cargo through ports. Even if the agency had the authority to suspend detention and demurrage fees, which he doesn’t believe it does, Maffei said such a move would hurt cargo flow overall, including for those such as agricultural exporters and truckers, who are advocating a complete end to such fees.

MSC launches global electronic bills of lading

After running pilot projects in select countries since 2019, Mediterranean Shipping Co (MSC) has officially launched the electronic bill of lading (eBL) for all customers worldwide, paving the way for widespread eBL adoption.

The eBL enables shippers and other supply chain stakeholders to receive and transmit the bill of lading document electronically, without any change or disruption to day-to-day business operations.

MSC used WAVE BL blockchain platform for its pilot phase. WAVE BL uses distributed ledger technology to ensure that all parties involved in a cargo shipment booking can issue, transfer, endorse and manage documents through a secure, decentralised network, containerline giant explained.

André Simha, global chief digital & information officer at MSC said. “It provides a digital alternative to all the possibilities available with traditional print documents, just much faster and more secure. Traditionally, the shipping industry has relied quite heavily on physical paper documents. And among these, the BL is the most important transport document in international trade,” stated Simha. “While there have been attempts to create an eBL solution in the past, we are now in a position to introduce a solution that can pave the way to mass eBL adoption, which will mean significant savings for the shipping industry.”