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August 28 2023

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www.joc.com 6 Journal of Commerce | August 28, 2023 Spotlight From the Editor Continued from page 4 to how extra loaders are viewed and the broader supplemental proposed rulemaking made since April. The World Shipping Council (WSC), which represents the major carriers, takes issue with changes to how busi- ness justifications will be considered and questioned how the agency could determine "reasonableness." "By expressly removing business factors from the regulatory text, the commission is effectively saying — its preambular assurances notwithstand- ing — that business factors will no longer be considered in evaluating reasonableness," the WSC wrote in a July 31 comment. "The explanation the commission offers — that business factors are too important to be included in the regulation — is directly contrary to the commission's claim that all legit- imate factors will be considered." The WSC argues the agency's proposed measure of determining when it's reasonable for a carrier to refuse service is so vague that all con- duct could fall under the rule. Some container lines privately complain that they're already being stung by FMC field staff who are apparently uncertain on how details of ship- ping reform should be implemented because they are new to the industry. Thanks to more Congressional funding, the FMC has increased resources to receive shipper com- plaints, and through shipping reform, can offer shippers and others an eas- ier way to challenge carrier practices. Agency staff have spoken at major industry events, including AgTC's annual conference in mid-June, to get the word out to shippers on the new avenues for relief available to them, raising the eyebrows of some of the attendees from container lines. Mixed reactions to Dye's terminal flow fixes A committee of US shippers that advises the Federal Maritime Commission (FMC) has given a mixed response to one commissioner's proposals to address systemic causes of port congestion. The National Shipper Advisory Council (NSAC) publicly reviewed Commissioner Rebecca Dye's July propos - als to fix ongoing problems with early return dates, empty container returns and notices of container availability at an Aug. 9 meeting. While NSAC member Bob Connor, executive vice president of Mallory Alexander International Logistics, said the committee thinks Dye's direction is spot-on, others were quick to point out the commissioner's lack of timeline on implementing these processes will only further hurt shippers who struggle from detention and demurrage fees out of their control. Dye is currently working with the ports of Los Angeles, Long Beach and New York–New Jersey to test out her proposals, which are: that a container is deemed available for pickup only when it becomes accessible at the terminal, empty containers must be returned to the same terminal from which they were retrieved and that the earliest return date for a loaded export container to be brought back to a terminal should be provided at the time the container is picked up. All the proposals have run into some kinks, Dye acknowledged, and the commissioner is still looking for feedback from the industry through Sept. 15. The next step would be a pilot program with truckers and shippers, possibly in the fall. There is also the time factor to consider. Any recommendations Dye makes could take more than a year to iron out. Emerging markets draw terminal operators Container terminal operators are expanding their footprint and cargo-handling capabilities across global port and landside operations in antic- ipation of growing trade volumes and sourcing shifts from diversified supply chains. Despite the Balancing act The clash between shippers and container lines highlights a major challenge for the FMC in finalizing rulemaking: honoring Congress' mandate to ensure that carriers are meeting their obligation under US shipping law to serve shippers while not creating a rule that's too commer- cially restrictive. Or as some warn in container shipping circles, the agency risks creating a rulemaking that's so restrictive that it's unconstitu- tional. Maritime attorney Rebecca Fenneman, for example, questions whether the agency can force a com- mon carrier to do business with all shippers on the same terms. Shipping law requires them to make their ser- vices public and not "unreasonably refuse" to deal or negotiate, "but they don't have to do so on exactly the same terms," Fenneman, told the Journal of Commerce Aug. 11. The WSC warns that the vague- ness of when it's unreasonable for a carrier to refuse a booking or fail to honor one will spur a wave of litiga- tion, weighing down the agency and do the opposite of Congress' mission to bring shippers swifter relief against unfair practices. Many shippers, how- ever, would welcome the expanded ability to address grievances, and would argue the solution is to give the agency more resources rather than not shrink from its mandate. How the FMC finalizes the rulemaking — with no firm deadline from Congress — will show just what type of agency the FMC will be in the post-OSRA-22 era. JOC Associate Editor Teri Errico Griffis contributed to this report. email: mark.szakonyi@spglobal.com UPCOMING EVENTS Inland Distribution Conference September 25 – 27, 2023 Chicago, Illinois events.joc.com/inland World Ports Conference 31 October – 2 November 2023 Abu Dhabi, United Arab Emirates worldportsconference.com TPM24 March 3 – 6, 2024 Long Beach, California events.joc.com/tpm Breakbulk & Project Cargo Conference April 24 – 26, 2024 New Orleans, Louisiana events.joc.com/breakbulk Ringo Chiu / Shutterstock.com

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