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FMC Highlights Strong Post-Pandemic Demand for Ocean Transportation and Key Licensing Programs

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FMC Highlights Strong Post-Pandemic Demand for Ocean Transportation and Key Licensing Programs

The Federal Maritime Commission (FMC) used the open session of its May 2024 meeting to emphasize the robust demand for cargo and passenger ocean transportation services post-pandemic. The session highlighted how the agency’s licensing and outreach programs are crucial for enhancing supply chain resiliency, protecting the public, and ensuring compliance among shipping companies and marine terminal operators (MTOs).

Resiliency in the Supply Chain

While containerized cargo volumes have decreased from their pandemic peaks, recent geopolitical events have underscored the vulnerability of the supply chain. The FMC’s Audit Program, established in July 2021 and expanded in 2023 to include MTOs, has become a vital communication channel between the FMC and key executives of major container shipping lines. Initially created to address concerns about ocean carrier detention and demurrage charges, the program now also covers operational, business, and compliance issues, fostering best practices and consistency for shippers.

A critical component of the Audit Program is the sharing of information related to demurrage and detention billing trends, access issues due to non-payment, and booking cancellations. This data provides the FMC with insights into market and operational trends, helping to preemptively address potential problems.

Licensing and Oversight of Ocean Transportation Intermediaries

The FMC plays a pivotal role in licensing ocean freight forwarders and non-vessel-operating common carriers (NVOCCs), collectively known as ocean transportation intermediaries (OTIs). These entities provide essential services that give shippers access to international markets. The Bureau of Certification and Licensing (BCL) manages the day-to-day responsibilities of licensing, registration, and bond programs, ensuring the protection of shippers.

There are currently over 9,000 domestic and foreign OTIs licensed or registered with the FMC. U.S.-based OTIs must be licensed and bonded, with 5,119 active licenses primarily in California, Florida, New York, New Jersey, and Texas. Foreign NVOCCs can choose to be either licensed or registered, both requiring a bond. Notably, most foreign registered NVOCCs are based in the People’s Republic of China.

Consumer Protection in the Cruise Industry

The FMC also safeguards consumers in the cruise industry through the Passenger Vessel Operators (PVO) Program, which mandates proof of financial responsibility from cruise operators for non-performance or casualties. This requirement is fulfilled via bonds, guaranties, insurance, or escrow, ensuring consumer protection. There are currently 51 companies with 276 vessels participating in the PVO Program.

Confidential Audit Program Discussions

In a closed session, the FMC discussed the Audit Program, presenting business confidential, company-specific information. This program was the sole topic of the closed session, emphasizing its importance and the sensitive nature of the data involved.

Conclusion

The FMC meeting underscored the continued strong demand for ocean transportation services and the critical role of its programs in maintaining supply chain resiliency and consumer protection. By enhancing regulatory oversight and fostering best practices, the FMC aims to ensure a robust and compliant maritime industry.

For more detailed information and to watch the meeting recording, visit the FMC YouTube channel.

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