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Aug 15 -- The Federal Maritime Commission seeks public comment on whether congestion of the carriage of goods has created an emergency situation causing a substantial, adverse effect on the competitiveness and reliability of the international ocean transportation supply system. Information received in response to this request will help inform the Commission's decision on whether an emergency situation exists, and whether to issue an emergency order to address any such situation. Submit comments on or before September 14, 2022.

At the beginning of the COVID-19 pandemic, the demand for worldwide ocean transportation services decreased significantly as lockdowns were imposed globally and people were hesitant to engage in normal economic activities. Accordingly, ocean common carriers cancelled many voyages, and the supply of ocean transportation services decreased.

Within a few months, however, U.S. consumer spending shifted markedly. Spending on services decreased significantly, while consumer spending on goods increased considerably—leading to a renewed and increased demand for ocean transportation services. Carriers responded with increases in vessel capacity, however this rapid shift in cargo volumes driven by consumer demand led to bottlenecks throughout the U.S. supply chain system. In particular, increased container dwell times at marine terminals led to inefficiencies, including delays in vessel berthing and motor carrier services at U.S. ports.

Over the last 2 years, there have been a variety of strategies employed by industry participants to reduce congestion throughout the U.S. ocean transportation system. For example, some carriers have diverted vessel services away from the most congested port areas in an effort to alleviate severe cargo congestion at major U.S. ports. This shift, however, has often resulted in increased congestion at previously non- or less-congested U.S. port areas or regions. Total U.S. port congestion, measured by the number of containers on ships waiting to berth, average ship waiting time at key U.S. ports, and container dwell time have all decreased in recent months. Relevant metrics, however, remain higher than pre-pandemic levels.

In view of these factors and consistent with the requirements set out in Section 18 of OSRA 2022, the Commission is seeking public comments on the following:

(1) Whether congestion of the carriage of goods has created an emergency situation of a magnitude such that there exists a substantial, adverse effect on the competitiveness and reliability of the international ocean transportation supply system. If so, please explain why and provide examples or data to support your view. If not, please explain why and provide examples or data to support your view;

(2) Whether an emergency order pursuant to Section 18 of OSRA 2022 would alleviate or improve such an emergency situation—and if so, why, and if not, why not; and

(3) The appropriate scope (duration and geographic) of such an emergency order, if the Commission were to issue such an order and the basis for that scope.
 
Context and Background:

On June 16, 2022, the Ocean Shipping Reform Act of 2022 (“OSRA 2022”) became law. Section 18 of OSRA 2022 authorizes the Federal Maritime Commission (the Commission) to issue an emergency order requiring any common carrier or marine terminal operator to share certain information with shippers and other specified entities when the Commission unanimously determines that congestion of the carriage of goods has created an emergency situation of a magnitude such that there exists a substantial, adverse effect on the competitiveness and reliability of the international transportation supply system.

If the Commission determines that cargo congestion has created an emergency situation, it may issue an order requiring any common carrier or marine terminal operator to share directly with relevant shippers, rail carriers, or motor carriers information relating to cargo throughput and availability. Such information sharing among industry participants is to improve the efficient transportation, loading, and unloading of cargo to or from (1) any inland destination or point of origin, (2) any vessel, or (3) any point on a wharf or terminal.

Any Commission-issued emergency order must be tailored in terms of duration and geographic scope; consider the likely burdens on common carriers and marine terminal operators; and consider the likely benefits on congestion relating to the purposes of the Shipping Act stated in 46 U.S.C. 40101.

An emergency order issued under OSRA 2022 would remain in effect for a period of not longer than 60 days and may be renewed by a unanimous vote of the Commission. The authority to issue an emergency order under Section 18 of OSRA 2022 terminates 18 months after the date of enactment of the Act.

A common carrier or marine terminal operator subject to a Commission-issued emergency order may file a petition for exception from one or more requirements of the emergency order. Petitions for exception must be based on a showing of undue hardship or other condition rendering compliance with such a requirement impracticable. Not later than 21 days from the petition filing date, the Commission is required to determine whether to grant the petition.

Section 18 of OSRA 2022 requires that, not later than 60 days after the effective date of the Act, the Commission must issue a request for information seeking public comment regarding specific criteria—namely, (1) whether congestion of the carriage of goods has created an emergency situation of a magnitude such that there exists a substantial, adverse effect on the competitiveness and reliability of the international ocean transportation supply system, (2) whether an emergency order under Section 18 would alleviate such an emergency situation, and (3) the appropriate scope of such an emergency order, if applicable. During this process, the Commission may also consult (as it deems appropriate) with other Federal departments and agencies and persons with expertise relating to maritime and freight operations. This notice fulfills this OSRA 2022 requirement.

FRN: https://www.federalregister.gov/d/2022-17582

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