March 31, 2020

FMC Issues Fact Finding Order in Response to COVID-19 Challenges

Order Aims to Promote Improved Efficiency of U.S. Ocean Transportation Supply Chains
Holland & Knight Alert
Gerald A. Morrissey III | Jameson B. Rice | Vincent J. Foley | J. Michael Cavanaugh

The Federal Maritime Commission (FMC) on March 31, 2020, issued an order – Fact Finding No. 29 International Ocean Transportation Supply Chain Engagement – to develop improvements to U.S. ocean transportation supply chains to address the global coronavirus (COVID-19) crisis.

The Order authorizes Commissioner Rebecca Dye to identify operational solutions to cargo delivery system challenges related to COVID-19. Dye recently headed the FMC's Fact Finding No. 28 addressing impact of industry practices for demurrage and detention charges, and she has also taken the initiative on several prior significant efficiency and supply chain issues.

The Order notes that:

"Recent global events have only highlighted the economic urgency of responsive port and terminal operations to the effectiveness of the United States international freight delivery system. Given the Commission's mandate to ensure an efficient and economic transportation system for ocean commerce, the Commission has a clear and compelling responsibility to actively respond to current challenges impacting the global supply chain and the American economy. Accordingly, the Commission has determined there is a compelling need to convene new Supply Chain Innovation Teams to address these challenges."

The Order allows Dye to form one or more FMC supply chain innovation teams to support the efforts. The Commissioner will engage key industry executives to participate on the innovation teams and will interview port directors to determine steps that they can take to identify and mitigate critical supply chain challenges. The Commission similarly convened innovation teams in 2016 to address supply chain issues. The Commission's statements accompanying the Order and a statement from FMC Chairman Michael Khouri indicate that Dye will obtain information and suggestions from various sectors of the ocean shipping industry, including carriers, intermediaries, marine terminal operators, truckers and inland service providers, and shipper interests and other sources, through public and private meetings and communications.

The Order does not fix a date for a final report, but the FMC indicates that the Commissioner will issue periodic update communications.

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