The U.S. Federal Maritime Commission (FMC) has issued a groundbreaking new regulation targeting unreasonable practices by ocean carriers during the booking process. Set to take effect on September 23, 2024 , this rule marks a significant tightening of compliance requirements in the maritime shipping industry.
A LONG-AWAITED SOLUTION FOR SHIPPERS
Have you ever faced the frustration of being arbitrarily denied cargo space by a shipping company? This common grievance among freight forwarders may soon become a thing of the past. As the container shipping market has expanded, some carriers have exploited contractual loopholes to reject shipments or engage in last-minute container dumping—practices the FMC's new rule specifically addresses.
CLEAR RULES, STRONGER PROTECTIONS
The regulation establishes precise guidelines for carrier behavior, with distinct legal consequences at different stages of the booking process:
• Negotiation phase rejections fall under 46 U.S. Code § 41104(a)(10)
• Execution phase rejections are governed by 46 U.S. Code § 41104(a)(3)
This nuanced approach ensures each case receives thorough review based on its specific circumstances.
COMPREHENSIVE COMPLIANCE REQUIREMENTS
All Vessel-Operating Common Carriers (VOCCs) transporting containerized goods must comply with the new rule. Importantly, the FMC clarifies that not all rejections constitute violations—carriers maintaining proper documentation of legitimate business reasons will avoid penalties.
Additionally, carriers must now submit annual confidential export policy reports detailing their pricing strategies, service offerings, equipment availability, and market conditions. This transparency measure allows the FMC to better evaluate the reasonableness of carrier practices.
INDUSTRY REACTION AND IMPACT
While shippers welcome the added protections, major carriers like Hapag-Lloyd (the world's fifth-largest container line) express concerns about increased compliance costs and potential competitive disadvantages. The FMC maintains these measures will promote fairer market competition and more rational behavior across the industry.
This regulatory shift promises to bring greater order to maritime shipping while strengthening protections for freight forwarders. As stakeholders across the supply chain prepare for these changes, one question remains: Is your business ready for the new era of shipping regulation?
