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Testimony of

Daniel B. Maffei

CHAIRMAN

FEDERAL MARITIME COMMISSION

Regarding “Impacts of Shipping Container Shortages, Delays, and Increased Demand on the 

North American Supply Chain”

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATIN

UNITED STATES HOUSE OF REPRESENTATIVES

JUNE 15, 2021

Good morning Chairman Carbajal, Ranking Member Gibbs, and members of the Subcommittee. 

I appreciate having the opportunity to speak with you today about our ocean freight system.

The American economy is dependent upon ocean freight. Container ships move commodities, 

consumer goods, and inputs necessary for manufacturers. The events of recent months have 

highlighted just how critical overseas shipping is to all Americans and how invaluable the 

contribution of ocean transportation is to economic competitiveness and our way of life.

When President Biden designated me Chair on March 29, I stepped into the position in the midst 

of the largest import boom in U.S. history. Key U.S. gateways for container shipping have 

handled cargo volumes that have been high and frequently record breaking. The Port of Long 

Beach recently announced that it has had ten consecutive months of breaking cargo movement 

records.1 Similarly the Port of Los Angeles reported the best April in the port’s history and that 

the complex has set records for volumes six of the last nine months.2 The Port of New York & 

New Jersey set a “new all-time monthly record” in March, superseding the one they set in just 

October 2020.3 The Port of Virginia set a new record in April for monthly volumes,4 South 

1

“Strongest April on Record at the Port of Long Beach”, Port of Long Beach Press Release, May 12, 2021

https://polb.com/port-info/news-and-press/strongest-april-on-record-at-port-of-long-beach-05-12-

2021/

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“Robust April Volume Breaks Another Record at Port of Los Angeles”, Port of Los Angeles Press 

Release, May 13, 2021 https://www.portoflosangeles.org/references/2021-newsreleases/news_051321_aprilvolume

3

“Strong Consumer Demand Drives March Volume to All-Time High”, Breaking Waves Blog, Port of New 

York & New Jersey, May 5, 2021. https://www.portbreakingwaves.com/strong-consumer-demanddrives-march-volume-to-all-time-high/

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“All-Time Record Volume, Strong Service Levels Continue at the Port of Virginia”, Port of Virginia Press 

Release https://www.portofvirginia.com/who-we-are/newsroom/all-time-record-volume-strongservice-levels-continue-at-the-port-of-virginia/
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Carolina reported a record breaking April5, Georgia a record breaking March,6and Oakland 

handled 100,000 import containers in a single month (April) for the first time in its history.7 In 

short, the system is at or beyond capacity. 

With such high demand for overseas imports, container shipping prices have rocketed up. The 

Shanghai Containerized Freight Index indicated that for May average freight costs are three 

times as high as they were this time last year.

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 An individual shipper needing to find a container 

on the spot market will likely pay an even higher multiple. And cost certainly is not the only 

challenge. For many shippers, finding a container and/or space on a ship has been sometimes 

impossible at any cost. And many other shippers have not been able to get their products to 

foreign markets in a reliable timeframe or get goods manufactured abroad to their American

customers without substantially higher than average delays. 

Of particular concern to me is the effect of the import boom on U.S. exports and the increases in 

price and lack of availability of containers for export. While it may surprise some of you to find 

out that the carriers are actually transporting more containers of our exports than in previous 

years, the number pales in comparison to the boom in imports and there is some truth that ocean 

carriers will carry fewer containers of American exports than they otherwise would have in order 

to get empty containers more rapidly back to Asian ports to fill with higher value import loads. 

Under my predecessor, then-Chairman Michael Khouri, the FMC had already started taking steps 

to address the many aspects of this crisis.

Last Spring, the Commission unanimously approved an interpretive rule on detention and 

demurrage. This measure had already worked its way through much of the rulemaking process 

before COVID hit but the Commission knew it could become even more important as the 

pandemic emerged. The rule addressed how the FMC will assess the reasonableness of detention 

and demurrage regulations and practices of ocean carriers and marine terminal operators 

(MTOs). The Commission stated it will consider the extent to which detention and demurrage 

charges and policies serve their primary purpose of incentivizing the movement of cargo and 

promoting freight fluidity.

Last fall, the Commission increased alliance reporting requirements and is considering whether 

additional changes are needed.9 Monitoring requirements might be further amended to demand 

5

“SC Ports handles record cargo volumes in April”, South Carolina Ports Press Release, May 11, 2021

https://scspa.com/news/sc-ports-handles-record-cargo-volumes-in-april/

6

“GPA’s March container trade leaps 48 percent”. Georgia Ports Authority Press Release, April 15, 2021

https://gaports.com/press-releases/gpas-march-container-trade-leaps-48-percent/

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“Port of Oakland passes milestone, sets all-time cargo record”, Port of Oakland Press Release, May 13, 

2021 https://www.portofoakland.com/press-releases/port-of-oakland-passes-milestone-sets-all-timecargo-record/

8 Alphaliner Monthly Monitor, May 2021

9

“Federal Maritime Commission Increases Global Alliances’ Information Monitoring Report 

Requirements”, Federal Maritime Commission Press Release, November 25, 2021. 

https://www.fmc.gov/federal-maritime-commission-increases-global-alliances-information-monitoringreport-requirements/
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more information and data of use to Commission economists, analysts, and lawyers in their 

work.

We have launched a formal investigation of issues at LA/LB and NY/NJ involving detention 

demurrage practices, container return requirements and lack of containers being made available 

for export. This investigation is called Fact Finding 29 and is led by our most experienced 

Commissioner, Rebecca Dye, and it could lead to a formal enforcement proceeding. Because it 

is an ongoing investigation, I am limited in what details I can give you. That said, one of the 

focuses of the investigation involves the Interpretive Rule on Detention and Demurrage which 

the commission unanimously put in place a year ago. We must make sure that rule is being 

heeded and, where it is not, we will bring enforcement actions. being heeded, root out the noncompliance.

Once I became Chairman, I was able to help the FMC build on these existing efforts in several 

ways:

1) As Commissioner Dye’s investigation got to the stage of analyzing data from the carriers 

and potentially developing enforcement cases – I made sure that she has the appropriate 

staff resources that she needs. This investigation is a vital part of the FMC’s overall 

effort to deal with this crisis and that is why I am so glad that you have invited 

Commissioner Dye as well so she can give you a report on the progress of that 

investigation. Know that she has my full trust as the investigation officer. 

2) I have started examining the industry response to last year’s detention and demurrage rule 

to determine whether additional rulemaking would be useful in deterring the sort of 

practices that seem to be making the current situation worse. Personally, I want to look at 

the billing and appeal policies for detention and demurrage (D&D) charges, issues 

involving where & when containers can be returned, and rapidly shifting Earliest Return 

Dates (ERDs) which can become unworkable for exporters.

3) I am also taking a good look at the way the FMC enforces the authority Congress has 

provided, and have provided some preliminary direction. It is vital that our enforcement 

capability provides a sufficient deterrent to abusive practices in the industry. I have 

directed the career staff at the Federal Maritime Commission to be open minded in 

applying the authorities we do have to make things better. Circumstances are different 

today and just because the FMC has not taken certain kinds of enforcement action in the 

past does not mean we should not now. 

4) Where appropriate, Commissioners are reaching out informally to carriers and terminal 

operators to encourage the industry to be as flexible as possible given the situation. As 

we have spoken to companies depending on ocean shipping, shipping groups, and their 

members, we have relayed their general concerns and observations to the carriers. We 

have also done outreach to other supply chain stakeholders such as truckers, retailers, 

port authorities, terminal operators, and labor unions. 
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5) The Commission recently voted to implement our new National Shipper Advisory 

Committee. This will be a body of 24 shippers—divided equally between importers and 

exporters—who will advise the Commission on policies relating to the competitiveness, 

reliability, integrity, and fairness of the international ocean freight delivery system.

The steps that I list here is not an exhaustive list and, if members want to suggest additional 

actions, I would welcome suggestions.

That said, it’s important to understand that the nature of the current crisis and the ocean freight 

system make it impossible for the FMC – or even the U.S. government as a whole – to alter or 

counteract much of the current situation.

First, the difficulties are global. Congestion, reliability, and cost issues are impacting ports, 

businesses, and ocean linked transportation networks not just in the United States but in Europe, 

Asia, the Indian Sub-Continent, Australia. Point to a spot on the map and you will find a portion 

of the world’s ocean cargo system struggling. Problems overseas create problems here and viceversa. That is of no comfort to a U.S.-based importer or exporter trying to move their cargo, but 

it does point to the enormity of the underlying problems. It also illustrates that solutions, if there 

are any to be had, will not be U.S. derived ones alone.

Second, the crisis is really one that does not just affect ocean shipping but goes up and down an 

interconnected U.S. supply chain. Attention has been focused on ports but that is because this is 

where inefficiencies with our freight transportation networks manifest themselves in pictures of 

large container ships lining up and bigger and bigger piles of containers. However, issues related 

to increased port congestion and diminished ocean carrier performance stretch far from the 

dockside of any marine terminal and deep into the United States interior. Insufficient landside 

infrastructure, whether roads or rail, means cargo cannot move. A lack of chassis, trucks, or 

truck drivers means cargo cannot move. Warehouses and distribution centers that are full means 

cargo has no place to go, and therefore cannot move. The underlying issues that are causing 

congestion in the freight delivery system are not new. Current events have only put into stark 

relief what are the systemic flaws and shortcomings in the Nation’s freight transportation 

capabilities. 

If an interconnected system becomes overwhelmed, a problem in one part of it becomes a 

compound problem. The once in a century snowstorm in Texas disrupted rail traffic for six 

weeks causing issues related to the availability of intermodal rail cars to serve Southern 

California ports.10 A crack in the I-40 bridge over the Mississippi River takes out an important 

intermodal truck route to and from railheads in Memphis and the time and expense added to 

ground moves ripples at the ports.

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 Congestion at Mid-West container yards causes a loss of 

income for drivers and they quit in frustration, potentially reducing the capacity to move 

10 “Dallas intermodal ramp flows recover after paralyzing winter storm”, Journal of Commerce, Ari Ashe, 

May 26, 2021 https://www.joc.com/rail-intermodal/class-i-railroads/bnsf-railway/dallas-intermodalramp-flows-recover-after-paralyzing-winter-storm_20210526.html

11 “Memphis’ cracked I-40 bridge creates headache for traffic, shipping”, NBCNews.com, the Associated 

Press, May 12, 2021 https://www.nbcnews.com/news/us-news/memphis-cracked-i-40-bridge-createsheadache-traffic-shipping-n1267187
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containers.12 These are just some of the issues that happen far from a port but impact operations 

at marine terminals and the ability to handle ocean containers. They contribute to congestion, 

diminish capacity, erode capability, add costs, and exacerbate problems everywhere.

Third, the primary reason for the congestion, high prices, and lack of reliability is that the 

demand for cargo shipping has outstripped the supply. 

For years, the increasing supply of space with the continued ordering of bigger and bigger ships 

kept ocean freight rates on the low side. And now it is COVID-induced demand that is largely 

the reason for the high freight rates. The drop in cargo volumes for the first half of 2020 

dramatically reversed beginning in July or August of 2020 when American consumers began an 

unrestrained buying spree that continues today. Ports that lost volumes in early months of 2020 

ended their years equaling their 2019 totals. In other words, a large portion of 12 months of 

volume moved in what turned out to be an approximately four-month period. The demand for 

imported goods has not waned and all indications are that demand will not diminish until 2022 at 

the earliest. 

Meanwhile, the supply of space on ships has not increased enough to keep pace. If this supply 

were being artificially limited by the carriers, there would be a clear path for the Federal 

Maritime Commission and/or the Justice Department to intervene. However, all indications are 

that the lines are trying to increase their capacities as quickly as possible. According to an 

Alphaliner report published in May 2021, there are only 60 idle ships representing less than 1% 

of the world’s available container ship fleet. Also, reports that the order book for new builds 

represents another 4 million TEU of capacity, approximately 18% of the current world’s fleet 

total capacity. Similarly, ocean carriers and intermodal equipment lessors have been buying new 

containers to increase the supply of boxes available to ship goods. Furthermore, we have seen 

increased use of extra loaders, additional capacity on strings, and vessel sharing agreements that 

have resulted in some expanded capacity. These are all positive developments they simply are 

not that substantial when compared with the overwhelming demand. 

Because of these three factors – global nature of trade, integrated nature of the supply chain, and 

the largely demand driven causes – we are limited in what can be done. 

We can put in measures to improve the overall capacity of the system – increase the supply in the 

supply-demand chart. Certainly, efforts to improve our physical infrastructure at our ports but 

also rail, truck networks, and inland ports would greatly improve capacity of the system.

Another initiative is to convene parties across the supply chain to establish better data sharing. 

One way to prevent bottlenecks, especially at facilities that are limited in ability to grow, is to 

have better communication about ERDs, container availability and key other key operational 

information. Such transparency would assist preventing avoidable D&D charges, and help 

shippers adjust their schedule. Shippers need more information than they currently get and 

providing it to them can only help the freight delivery system. I believe there is a role for the 

12 “US drayage drivers quitting as rail ramp congestion crimps pay”, Journal of Commerce, Ari Ashe, May 

19, 2021 https://www.joc.com/trucking-logistics/drayage/drayage-divers-quitting-rail-ramp-congestioncrimps-pay_20210519.html
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FMC to act as a convener and possibly to formulate incentives to encourage the adoption of more 

open data and information policies among carriers, terminals, ports, and land transportation. 

However, improvements to our physical and informational infrastructure are long-term solutions 

that will take years to develop. 

In the meantime, I as Chairman and the Federal Maritime Commission have been getting pleas to 

force carriers to provide more export containers, ban all detention and demurrage charges in 

certain ports and DO something about these outrageously high prices including revoking the 

limited anti-trust exemption for carrier alliances. I cannot help but empathize with the 

frustrations of shippers and beneficial cargo owners – many of which are small and mediumsized businesses. When I served in Congress, I represented a district with agricultural exporters 

and know how vital it is that they can transport their goods to foreign markets.

Nonetheless, the legislation governing ocean shipping and determining the powers of the Federal 

Maritime Commission limits the actions we can take. The law allows us to take action against a 

carrier or terminal if they engage in a prohibited anticompetitive behavior, discriminatory 

practices again U.S. companies or products, unlawful deception, or some other unreasonable 

practice. It allows us to take action against an alliance of carriers but only under certain 

circumstances when the alliance has broken its own agreement or is clearly resulting in an 

unreasonably higher price or lower level of service than otherwise would be the case. 

The law does NOT allow us to set rates or set a ceiling for what it costs to move an ocean 

container. It does not allow us to demand that ships service certain ports, carry particular 

products, or establish a quota for the number of export containers it must accommodate. If a 

sky-high cost for shipping a container is due simply to the laws of supply and demand, we have 

no authority to change that.

What we can do and are doing is to work hard every single day to make sure nobody makes a 

profit from this current crisis in a way that violates the Shipping Act. We can help exporters and 

other U.S. shippers navigate the system and file complaints. We can communicate with various 

stakeholders in the supply chain to help them work together to make the system more efficient 

and reliable. And we can stay in close touch with other agencies of the Federal government and 

you in the Congress to find new ways of making this COVID pandemic and its aftermath easier 

to live with.

I am happy to take your questions.