The Federal Maritime Commission (FMC) will expand its Fact Finding 29 effort, the International Ocean Transportation Supply Chain Engagement, to now include practices that have arisen relative to the return of empty containers and other questionable practices.
The expanded effort comes in the wake of several industries, including the U.S. agriculture industry, complaining that foreign carriers are rejecting exports of ag products in favor of sending empty containers back to China to be used to send Chinese goods back to the U.S. The situation arose, according to reports, after Chinese transportation officials met with major carriers and called on them to cut rates and reinstate some sailings that had been cancelled.
Indications are the rejection of agriculture shipments is linked to costs and time associated with such shipments to China — they are cheaper to move and take longer to unload. By sending the empty containers back to China to be filled with Chinese goods, carriers can then charge higher shipping rates. The original Fact Finding 29 investigation was launched to “identify operational solutions to cargo delivery system challenges related to recent global events.”
The expanded investigation is looking at “practices and regulations that are having an unprecedented negative impact on congestion and amplifying bottlenecks at these ports and other points in the Nation's supply chain,” FMC said. The expanded check is focusing on “alliance carriers who call on the Port of New York and New Jersey or who call on the Port of Long Beach and the Port of Los Angeles are employing practices or regulations” that are restricting U.S. exports via “practices and regulations related to demurrage and detention, empty container return” and “practices related to the carriage of U.S. exports.”
It is not clear what results of the expanded effort will be, but actions involving agriculture shipments which have increased demurrage charges and other costs due to shipment rejections have caught the attention of U.S. shipping regulators.