FEDERAL MARITIME 

COMMISSION

FACT FINDING INVESTIGATION 29

FINAL REPORT

EFFECTS OF THE COVID-19 PANDEMIC ON THE

U.S. INTERNATIONAL OCEAN SUPPLY CHAIN: 

STAKEHOLDER ENGAGEMENT AND 

POSSIBLE VIOLATIONS OF 46 U.S.C. § 41102(c)

MAY 31, 2022
Table of Contents

I. EXECUTIVE SUMMARY..............................................................................4

Fact Finding Conclusions...............................................................................6

II. FACT FINDING 29..........................................................................................8

A. Background for Fact Finding 29 ....................................................................8

B. Initial Order of Investigation........................................................................12

C. Phase One – Innovation Teams....................................................................12

1. Original Nine Supply Chain Innovation Teams.......................................14

2. Commission Action - Service Contract Exemptions ...............................15

3. Other Identified Challenges......................................................................16

4. Ocean Common Carrier Innovation Team Meetings...............................20

5. Regional Innovation Teams......................................................................21

a. Southern California Team...................................................................21

b. North Atlantic Team............................................................................23

c. Gulf Coast Ports Team........................................................................24

6. Memphis Innovation Team ......................................................................25

7. Other Approaches Considered..................................................................26

D. Phase Two – Information Gathering............................................................27

1. Supplemental Order..................................................................................29

2. Fact Finding 29 Emails.............................................................................30

3. Advice to the Trade ..................................................................................31

4. Information Demands...............................................................................31

a. Demurrage and Detention ...................................................................32

b. Empty Container Return......................................................................33

c. Earliest Return Dates...........................................................................37

d. Innovation Ideas..................................................................................38

e. Container Availability .........................................................................38

5. Supplemental Carrier and Marine Terminal Innovation Teams ..............39

III. FACT FINDING OFFICER CONCLUSIONS FROM PHASE I 

AND PHASE II...............................................................................................40

A. International Ocean Freight Pricing and Market Analysis ..........................40

1. Background...............................................................................................40

2. Commission Competition Enforcement and Shipping Act 6(g) 

Standard ...............................................................................................42

3. Market Analysis........................................................................................44
B. Detention and Demurrage ............................................................................45

1. Interpretive Rule.......................................................................................45

2. Information Demands...............................................................................46

3. Enforcement of Interpretive Rule.............................................................46

4. Need for Information on Which to Base Enforcement Actions...............47

IV. COMMISSION ACTION: INTERM AND SUPPLEMENTAL 

RECOMMENDATIONS...............................................................................47

A. Interim Recommendations...........................................................................47

1. Minimizing Barriers to Private Party Action ...........................................48

2. Clarifying Commission and Industry Processes.......................................50

3. Encouraging Assistance with Commission Investigation........................52

4. Bolstering CADRS ...................................................................................53

B. Final Recommendations...............................................................................53

1. New FMC Supply Chain Program ...........................................................55

2. Rulemaking on Empty Container Return .................................................55

3. Rulemaking on Earliest Return Dates......................................................57

4. Ocean Carrier and Marine Terminal Compliance Officers......................58

5. Outreach Initiatives to Stakeholders.........................................................58

6. Enhanced Interagency Cooperation for Agricultural Exporters...............59

7. Commission Investigation into Tariff Surcharges and Other 

Charges ................................................................................................59

8. Rulemaking to Define Merchant Haulage and Carrier Haulage ..............59

9. New National Seaport, Marine Terminal, and Ocean Carrier 

Advisory Committee............................................................................59

10. Rapid Response Team in Office of Consumer Affairs and Dispute 

Resolution Services .............................................................................60

11. FMC Supply Chain Innovation Teams on Blank Sailings.......................60

12. Memphis Supply Innovation Team..........................................................61

V. PATH FORWARD – MUTUALLY ENFORCEABLE 

CONTRACTS.................................................................................................61

APPENDIX.............................................................................................................63
FACT FINDING 29 – FINAL REPORT 4

I. EXECUTIVE SUMMARY

The Federal Maritime Commission (FMC or Commission) has a clear and 

compelling responsibility to actively respond to the challenges impacting the 

global supply chain and the American economy. Accordingly, on March 31, 2020, 

eighteen days after the President declared a national emergency concerning the 

coronavirus disease 2019 (COVID-19), the Commission launched Fact Finding 29

(FF29). The Commission’s Fact Finding Order appointed Commissioner Rebecca 

F. Dye as the Fact Finding 29 Officer and directed her to engage supply chain 

stakeholders in public or non-public discussions to identify commercial solutions 

to certain unresolved supply chain issues that interfere with the smooth operation 

of the U.S. international ocean supply chain. In addition, it directed her to form one 

or more FMC International Ocean Supply Chain Innovation Teams (Innovation 

Teams), composed of leaders from commercial sectors of the U.S. international 

ocean supply chain, to develop commercial solutions to port congestion and related 

supply chain challenges.

Initially, the Fact Finding focused on convening new Innovation Teams to 

address the challenges facing the supply chain. As the challenges created by the

COVID-19 pandemic evolved, Fact Finding 29 evolved, and over the course of the 

following two years, the Fact Finding 29 Investigation developed three distinct 

phases: 

• Phase 1 – Supply Chain Innovation Teams;

• Phase 2 – Information and Research; and

• Phase 3 – Commission Action.

In the early stages of the COVID-19 pandemic, Fact Finding 29 focused on 

using Innovation Teams to understand the most pressing supply chain challenges 

the United States was facing to find commercial solutions and when possible, and 

to eliminate regulatory requirements that had become burdensome. The goal was to 

work with stakeholders to identify both commercial and regulatory solutions and to 

disseminate helpful information to mitigate the challenges faced by all affected 

parties.
FACT FINDING 29 – FINAL REPORT 5

During the first two phases, the Fact Finding Officer spoke to hundreds of 

U.S. importers, exporters, truckers, and others through virtual speeches, other 

virtual meetings, phone conversations, and emails. Three areas of most concern 

brought to the Fact Finding Officer’s attention were: 1) the increase in the price of 

ocean shipping during the COVID-19 pandemic; 2) the ongoing unreasonable 

detention and demurrage charges and other charges imposed by ocean carriers, 

seaports, and marine terminals; and 3) the supply chain bottlenecks due to 

unresolved operational problems, including disruption of information concerning 

“blank sailings.”

When it became clear that these issues were the primary concern of 

stakeholders, the Fact Finding Officer pivoted to focus on investigating the state of 

the market for ocean liner services and the assessment and billing of detention and 

demurrage charges. The Fact Finding Officer also focused on whether regulated 

entities were complying with their regulatory obligations. Additionally, the Fact 

Finding Officer began to gather information to assist in developing specific interim 

and final recommendations to inform further Commission action. During this 

second phase, the Fact Finding Officer examined market conditions based on 

industry data and Commission programmatic information. The Fact Finding 

Officer also issued information demands to carrier and marine terminal operators 

(MTOs) regarding their demurrage and detention practices and other issues.

In 2021, the Fact Finding Officer determined that, responsive to stakeholder 

concerns about the price of ocean services and problems with detention and 

demurrage charges, there were solutions that would address certain problems in the 

global ocean supply chain. These Interim Recommendations were organized 

around three principles:

• Minimizing Barriers to Private Party Action;

• Clarifying Commission and Industry Processes; and 

• Encouraging Assistance with Commission Investigations.

The Fact Finding Officer recommended a series of guidance documents, 

advice to the trade, other educational outreach, and a rulemaking to clarify 

Commission processes and encourage stakeholders to bring claims when 

warranted.
FACT FINDING 29 – FINAL REPORT 6

Fact Finding Conclusions

Based on information and research gathered during this second phase, the 

Fact Finding Officer has concluded that, using established antitrust analytical tools

also used by our sister competition agencies (the Department of Justice and the 

Federal Trade Commission) - and notwithstanding certain misconceptions - the 

current market for ocean liner services in the Trans-Pacific trade is not

concentrated and the Trans-Atlantic trade is only minimally concentrated. 

Competition among ocean common carriers,

1 among the three major alliances and 

among the members in each of these alliances, is vigorous. The market for ocean 

services remains highly contestable, particularly in the Trans-Pacific trade. Finally, 

the Fact Finding Officer concludes that although certain ocean transportation 

prices, especially spot prices, are disturbingly high by historical measures, those 

prices are exacerbated by the pandemic, an unexpected and unprecedented surge in 

consumer spending, particularly in the United States, and supply chain congestion,

and are the product of the market forces of supply and demand.

The Fact Finding Officer is concerned that certain ocean carriers, despite the 

actions of the new FMC Vessel-Operating Common Carrier Audit Program and 

recent compliance efforts are not in full compliance with the incentive principle of 

the Commission’s Interpretive Rule on Demurrage and Detention. The Fact

Finding Officer emphasizes that the Interpretive Rule on Detention and Demurrage 

promulgated by the Commission pursuant to Fact Finding 28 provides the shipping 

public with an enforceable principle that the Commission employs to assess the 

reasonableness of demurrage and detention practices and regulations under the 

Shipping Act of 1984, as amended.2 The Interpretive Rule describes a nonexclusive list of factors the Commission may consider in evaluating claims and 

complaints that come before the agency under 46 U.S.C. § 41102(c) and 46 C.F.R. 

545.4(d). The Incentive Principle of the Interpretive Rule developed pursuant to

1 46 C.F.R. § 535.104(u) ("Ocean common carrier means a common carrier that operates, for all or part of 

its common carrier service, a vessel on the high seas or the Great Lakes between a port in the United 

States and a port in a foreign country, except that the term does not include a common carrier engaged in 

ocean transportation by ferry boat, ocean tramp, or chemical parcel-tanker.”).

2 The Shipping Act, the Foreign Shipping Practices Act, Section of the Merchant Marine Act, 1920, and 

sections 2 & 3 of P.L. 87-777 were repealed. The text of those Acts was codified in in Subtitle IV of Title 

46, becoming positive law and they ceased to exist as freestanding statutes.
FACT FINDING 29 – FINAL REPORT 7

“notice and comment,” is enforced through the Commission’s consideration of 

complaints and enforcement actions under section 41102(c) of Title 46, United 

States Code.

The Fact Finding Officer is also concerned that the Commission lacks the 

regulatory tools to deal with the numerous new charges imposed on U.S. shippers 

and truckers by ocean carriers and marine terminals through tariffs and with other 

supply chain dislocations within the Commission’s authority. Several final 

recommendations by the Fact Finding Officer address these concerns.

Finally, based on the information gathered, the Fact Finding Officer further 

believes that the most productive path forward for shippers and ocean carriers alike 

would be to enter mutually enforceable and binding service contracts-- true 

“meeting of the minds”-- that are enforceable commercial documents. For some 

time, the Fact Finding Officer has been concerned that the contracts negotiated by 

many U.S. importers and exporters lack this mutuality of understanding and 

obligation and are not enforceable. Without enforceable contracts, shippers are 

unable to protect themselves from volatile shipping rates and ocean carriers have 

few forecasting tools to provide the shipping capacity necessary to serve their 

customers.

As the Fact Finding Officer concludes Fact Finding 29, the Fact Finding 

Officer issues a series of Final Recommendations to further alleviate dislocations 

in the U.S. international ocean supply chain. These are:

1. A new Commission “International Ocean Shipping Supply Chain Program” 

with dedicated personnel.

2. A rulemaking to provide coherence and clarity on empty container return 

practices. 

3. A rulemaking to provide coherence and clarity on earliest return date 

practices.

4. Continued Commission support for the new FMC “Vessel-Operating 

Common Carrier Audit Program” including developing a new requirement 

for ocean carriers, seaports, and marine terminals to employ an FMC 

Compliance Officer.
FACT FINDING 29 – FINAL REPORT 8

5. An FMC Outreach Initiative to provide more information to the shipping 

public about FMC competition enforcement, service contracts, shippers 

associations, and forecasting, among other topics.

6. Enhanced cooperation with the federal agency most experienced in 

agricultural export promotion, the Department of Agriculture, concerning 

container availability and other issues.

7. A Commission Investigation into practices relating to charges assessed by 

ocean common carriers, seaports, and marine terminals through tariffs.

8. A rulemaking to provide coherence and clarity on merchant haulage and 

carrier haulage.

9. A new “National Seaport, Marine Terminal, and Ocean Carrier Advisory 

Committee” to work cooperatively with the Commission’s National Shipper 

Advisory Committee.

10. A revival of the Rapid Response Team program as agreed to by all ocean 

carrier alliance CEOs.

11. FMC International Ocean Supply Chain Innovation Teams engagement to 

discuss blank sailing coordination and other matters as needed to support 

recommendations.

12. A reinvigorated focus on the extreme problems at Memphis rail heads and 

around the country.

The Fact Finding Officer believes that the implementation of the Fact 

Finding 29 Interim Recommendations and the implementation of the Fact Finding 

29 Final Recommendations will alleviate pressing problems experienced by 

Commission stakeholders and allow the Commission to achieve its objective of 

eliminating obstacles to a smooth and efficiently operating international ocean 

supply chain.

II. FACT FINDING 29

A. Background for Fact Finding 29

In December 2019, The People’s Republic of China (China) first identified 

cases of what would later be called “COVID-19” in the central city of Wuhan. The 

following month, the World Health Organization (WHO) declared the outbreak a 
FACT FINDING 29 – FINAL REPORT 9

public health emergency of international concern. Since then, the world has 

grappled with the many effects of the COVID-19 virus. 

One early, but dynamic, consequence of the outbreak of COVID-19 was its 

effect on the global ocean supply chain.3 Originally, as the presence of the virus 

was largely limited to China, the global supply chain effects were primarily 

reactive to the impact in China. In late January 2020, Chinese authorities extended 

the Lunar New Year holidays nationwide4 and Chinese businesses told employees 

not to return to work.5 The ensuing return to work delay, coupled with lack of 

personnel mobility and traffic restrictions led to an initial difficulty in recovering 

production.6 However, despite the isolated nature of these initial impacts, China’s 

role and importance to global trade and, in particular, Wuhan’s global significance, 

meant that even these relatively isolated restrictions were felt on a global stage.

Responding to the outbreak in China, in the first 24 weeks of 2020, ship 

calls around the globe diminished by 8.7 percent.7 As the virus spread, individuals 

outside of China began voluntarily staying home and governments began imposing

lockdowns. As lockdowns were imposed globally and fewer people were engaging 

in the economy, vessel calls fell even further, so that in the second quarter, the 

number of calls fell by 17 percent.8

In May through August 2020, the three largest container shipping alliances 

(THE, 2M, and OCEAN) announced cancellation of 126 scheduled sailings 

3 Julianne Dunn, COVID-19 and Supply Chains: A Year of Evolving Disruption, Federal Reserve Bank of 

Cleveland, Feb. 26, 2021 (“Supply chain disruptions have been ever-present since the onset of the 

COVID-19 pandemic, but they’ve been largely idiosyncratic, impacting different firms at different times 

for different reasons.”).

4 Reuters, China's cabinet to extend Lunar New Year holidays: state broadcaster, (Jan. 26, 2020), 

https://www.reuters.com/article/us-china-health-holidays/chinas-cabinet-to-extend-lunar-new-yearholidays-state-broadcaster-idUSKBN1ZP0PQ, (last visited May. 17, 2021).

5 BBC Business, Coronavirus: Companies tell workers 'stay at home’ (Jan. 27, 2020), 

https://www.bbc.com/news/business-51260149, (last visited May. 17, 2021).

6 Kilpatrick J., and Barter L., COVID-19: Managing supply chain risk and disruption, Deloitte, 

https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/finance/SupplyChain_POV_EN_FINAL-AODA.pdf, (last visited May. 17, 2021).

7 United Nations Conference on Trade and Development, COVID-19 and maritime transport: Impact and 

responses, Mar. 2021, https://unctad.org/webflyer/covid-19-and-maritime-transport-impact-andresponses, (last visited May. 17, 2021).

8 Id. 
FACT FINDING 29 – FINAL REPORT 10

between Asia and North America, and 94 sailings between Asia and Europe.9 It is 

estimated that container lines ultimately canceled more than 1,000 voyages during

the first six months of 2020.10

Coupled with the initial reduction in consumer demand was a dramatic 

increase in the demand for medical equipment, both for medical professionals and 

the general public. In February 2020, the World Health Organization assessed that 

demand for Personal Protective Equipment (PPE) increased 100 times higher than 

normal.11 In early 2020, most of the world’s face masks were made in China, but 

as the virus spread through China, the government forbade their export and China 

began importing masks.12

As the pandemic spread, the demand for PPE increased. Prior to 2020, the 

United States was importing more than 20% of its PPE.13 Specialty PPE was even 

more dependent on imports with an estimated 90% of N95 masks being 

imported.14 Thus, while consumer demand decreased for certain consumer goods, 

the need for PPE dramatically increased. Ports and marine terminals struggled with 

identifying which imports contained the necessary PPE and which containers 

contained consumer goods. 

During the first half of 2020, there was a tremendous decrease in the demand 

for most goods, as countries worldwide went into lockdown. However, this decline 

did not last long. By summer 2020, demand for U.S. imports exploded. This was in 

9 Greg Knowler, Alliances outline extensive blank sailings for Q3, (Jun. 3, 2020), 

https://www.joc.com/maritime-news/alliances-outline-extensive-blank-sailings-q3_20200603.html, (last 

visited May. 17, 2021).

10 U.S. International Trade Commission, The Impact of the COVID-19 Pandemic on Freight 

Transportation Services and U.S. Merchandise Imports, 

https://www.usitc.gov/research_and_analysis/tradeshifts/2020/special_topic.html#_ftnref10.

11 Lisa Schnirring, WHO warns of PPE shortage; COVID pace slows slightly in China, (Feb. 7, 2020), 

https://www.cidrap.umn.edu/news-perspective/2020/02/who-warns-ppe-shortage-ncov-pace-slowsslightly-china, (last visited May. 17, 2021).

12 Liz Alderman, As Coronavirus Spreads, Face Mask Makers Go Into Overdrive, New York Times, 

(Feb. 6, 2020), https://www.nytimes.com/2020/02/06/business/coronavirus-face-masks.html, (last visited 

May. 17, 2021).

13 Dai, T., Bai, G. & Anderson, G.F. PPE Supply Chain Needs Data Transparency and Stress Testing. 

Journal of General Internal Medicine 35, 2748–2749 (Jun. 30, 2020), https://doi.org/10.1007/s11606-020-

05987-9.

14 Id. 
FACT FINDING 29 – FINAL REPORT 11

part because businesses had the opportunity to adjust to new safety protocols, but 

also because of the rapid growth of e-commerce as consumers turned to online 

buying in record numbers.

The increased demand shocked the U.S. international ocean freight delivery

system. By the fourth quarter of 2020, container lines were operating at nearly full 

capacity.15 Blank sailings, which accounted for 21 percent of all voyages in May 

2020, declined to 1 percent by October 2020.16 The number of shipping containers 

in circulation during the second half of 2020 was insufficient to meet higher than 

anticipated consumer demand for imports.17 Exporters, particularly agricultural 

exporters, suffered from a lack of container availability due to constrained 

capacity.

Soaring consumer demand for goods in the United States also led to record 

cargo volumes at major U.S. ports. The Port of Los Angeles, the Nation’s largest 

port, reported the busiest September in its 114-year history.18 Similarly, the Port of 

Virginia saw a dramatic increase in volumes with reported September 2020 

volumes 4.4 percent higher than September 2019.19

Beginning in the fourth quarter of 2020, the United States and the world atlarge was faced with increased challenges as the COVID-19 pandemic and its 

effects disrupted our global ocean supply chain. Increased demand exposed

existing problems in the international ocean supply chain, leading to extreme 

supply chain port and marine terminal congestion.

15 Lazaro Gamio and Peter Goodman, How the Supply Chain Crisis unfolded, New York Times, (Dec. 5, 

2021), https://www.nytimes.com/interactive/2021/12/05/business/economy/supply-chain.html, (last 

visited May. 17, 2021).

16 Id. 

17 Gregory LaRocca, Rising Maritime Freight Shipping Costs Impacted by Covid-19, Office of Industries 

U.S. International Trade Commission, (Apr. 2021), 

https://www.usitc.gov/publications/332/executive_briefings/ebot_greg_larocca_freight_costs_weighing_c

ovid_pdf.pdf.

18 Anshu Siripurapu, What Happened to Supply Chains in 2021?, Council on Foreign Relations, (Dec. 13, 

2021), https://www.cfr.org/article/what-happened-supply-chains-2021, (last visited May. 17, 2021).

19 Ari Ashe, Port of Virginia marks strong recovery with record September, Journal of Commerce, (Oct. 

1, 2020), https://www.joc.com/port-news/us-ports/port-virginia/port-virginia-marks-strong-recoveryrecord-september-volume_20201001.html, (last visited May. 17, 2021).
FACT FINDING 29 – FINAL REPORT 12

B. Initial Order of Investigation

During the first quarter of 2020, as the COVID-19 pandemic escalated in the 

United States and internationally, the Commission considered ways to respond to 

urgent cargo delivery dislocations in the U.S. international ocean freight delivery 

system. 

In the earliest days of the pandemic, import cargo volumes dropped 

precipitously and ocean carriers “blanked” sailings. Imports that were delivered 

contributed to congestion at U.S. ports, particularly on the West Coast, because the 

import cargo was not being picked due to business shutdowns. The congestion was 

further exacerbated by empty containers.

On March 31, 2020, the Commission issued an Order authorizing 

Commissioner Rebecca F. Dye to identify operational solutions to cargo delivery 

system challenges related to the COVID-19 pandemic.20 Among other things, that

Order for Fact Finding 29, International Ocean Transportation Supply Chain 

Engagement, authorized the Fact Finding Officer to form multi-industry 

Innovation Teams to develop critical supply chain interventions.

C. Phase One – Innovation Teams

In a press release, also issued on March 31, 2020, the Fact Finding Officer 

announced the intent to engage key executives to participate on new Innovation

Teams. The press release also invited individuals wishing to provide information to 

Commissioner Dye to email ff29@fmc.gov.

21

The Commission’s use of Innovation Teams was not a novel approach. The 

Fact Finding Officer had used similar authority in Fact Finding 2822 and in the 

20 Order: International Ocean Transportation Supply Chain Engagement, 85 Fed. Reg. 19146 (Apr. 6, 

2020).

21 FMC Press Release: Commissioner Dye Leading FMC Initiative to Address Urgent COVID-19 Supply 

Chain Impacts, (Mar. 31, 2020), https://www.fmc.gov/dye-leading-fmc-initiative-address-urgent-covid19-supply-chain-impacts/.

22 See Fact Finding No. 28 Final Recommendation to the Commission, (Aug. 27, 2019)

https://www.fmc.gov/wp-content/uploads/2019/09/FF28FinalReportLetter.pdf.
FACT FINDING 29 – FINAL REPORT 13

2015 Supply Chain Innovation Teams Initiative.

23 When refining this approach, 

the Fact Finding Officer consulted a variety of academic and business resources 

and experts in supply chain management, process innovation, transportation 

research, and business teams. The FMC Supply Chain Innovation Teams initiative 

focuses on three concepts: teamwork, international ocean supply chain operations,

and incremental process innovation. 

The Innovation Teams consist of 5-12 members representing multiple 

industries who are committed to a shared goal — developing the best ways to 

improve international supply chain effectiveness, reliability, and resilience.24

Effective Team participants are dynamic industry leaders with extensive 

experience, broad perspective, and collaboration skills that allow them to think 

beyond their immediate company or industry interests (“step out of their silos”)

and take an encompassing view of the entire ocean supply chain system.

In Fact Finding 28, after several months of information gathering, the Fact 

Finding Officer recommended that the Commission organize Innovation Teams 

composed of industry leaders who ultimately met on a limited, short-term basis to 

refine commercially viable demurrage and detention approaches. The valuable 

discussions with stakeholders during this phase of the investigation ensured that 

recommendations that resulted from Fact Finding 28 would be advantageous and 

workable.

As in previous Innovation Teams, the teams organized under Fact Finding

29 were composed of business leaders whose senior level positions included 

responsibility and influence over their companies’ operations and who were 

positioned to implement recommendations developed by the Innovation Teams. As 

Fact Finding 29 was conducted during a period when travel and in-person group 

meetings were constrained by pandemic-related concerns, Fact Finding 29 Teams 

met virtually to focus on the changing dynamics that various ocean carriers, 

exporters, importers, shipping intermediaries, drayage operators, seaports, 

longshore labor, and marine terminals were experiencing.

23 See FMC Supply Chain Innovation Team Initiative Final Report, (Dec. 5, 2017), 

https://www.fmc.gov/wp-content/uploads/2018/08/SCITFinalReport-reduced.pdf.

24 Id. at 5. 
FACT FINDING 29 – FINAL REPORT 14

Initially, nine Innovation Team meetings with fifty-one participants were 

held. However, in the following months, the Fact Finding Officer would ultimately 

convene two additional groupings of teams. In sum, during this first phase, three 

types of teams met: 

• Original Nine Supply Chain Innovation Teams;

• Ocean Common Carrier Teams; and

• Regional Teams.

1. Original Nine Supply Chain Innovation Teams 

When the Fact Finding Officer began the Fact Finding 29 investigation,

consumer demand was down, and ocean carriers were cancelling a significant

number of sailings. At the same time, there was a dramatic increase of demand for 

PPE. It was in this context that teams began meeting to identify commercial 

solutions to problems facing the ocean supply chain. 

The first nine multi-industry Innovation Teams met in mid-April 2020 and

were presented with three basic questions25:

• What can the Federal Maritime Commission do to provide relief or 

assistance to mitigate negative impacts on the international ocean supply 

chain related to COVID-19?

• What can companies involved in ocean cargo delivery do to respond to 

existing supply chain challenges and bottlenecks?

• What can supply chain actors do to strengthen the overall performance of 

the American international ocean freight delivery system?

The goal of these initial meetings was to identify what actions could provide 

immediate relief to the most pressing challenges the American freight delivery 

system faces from COVID-19 related disruptions. The desire was not only to find

actions the industry could take on a commercial level to mitigate problems, but 

also to identify what actions the Commission could take to provide relief. It was 

25 The Fact Finding Officer shared these three initial questions with the public in a press release and 

encouraged members of the public not participating on a team, but who nonetheless wished to provide 

advice, to email FF29@FMC.gov. FMC Press Release: Fact Finding 29 Supply Chain Innovation Teams 

to Begin Work, (Apr. 6, 2020), https://www.fmc.gov/Fact Finding-29-teams-to-begin-work/.
FACT FINDING 29 – FINAL REPORT 15

through these initial meetings that the Fact Finding Officer was able to identify and 

recommend Commission action in the form of service contract filing exemptions to 

alleviate the strain felt by shippers. The Fact Finding Officer was also able to work 

with carriers and terminals on their efforts to prioritize cargo. Additionally, 

through these meetings, the Fact Finding Officer was able to identify the four main 

issues that would become a focal point throughout the investigation. 

2. Commission Action - Service Contract Exemptions 

At that time, the Fact Finding was focused on identifying things the 

Commission could do to alleviate the challenges caused by the COVID-19

pandemic. The first Team meetings were focused on what the FMC could do to 

provide relief and FMC assistance.26

One of the early issues raised by shipper Team members was difficulty in 

filing service contracts. Many service contracts had May 1 or June 1 end dates, and 

some businesses were struggling to conduct contract negotiations while dealing 

with issues caused by COVID-19. Several Team members also indicated that stayat-home orders had resulted in a growing number of businesses working remotely. 

At the time, Commission regulations required that ocean common carriers 

file original service contracts with the Commission “before any cargo moves 

pursuant to that service contract.”27 In contrast, the Commission’s regulations 

provided more flexibility to service contract amendments, which could be filed 

within 30 days after the amendment’s effective date.28

Acting on the recommendation of the Fact Finding Officer, on April 27, 

2020, the Commission issued a temporary blanket exemption extending the current 

filing flexibilities for service contract amendments to original service contracts.29

This exemption allowed parties time to adapt to the increased pressures that have 

26 See id.

27 46 C.F.R. §§ 530.8(a)(1), 530.14(a) (2019).

28 See id. §§ 530.3(i), 530.8(a)(2), 530.8(b)(8)(i), 530.14(a).

29 Order: Temporary Exemption from Certain Service Contract Requirements, 2 F.M.C.2d 65 (FMC 

2020).
FACT FINDING 29 – FINAL REPORT 16

been placed upon them by COVID-19 and minimize disruptions to the contracting 

process. 

The Commission Order granting the exemption issued on April 27, 2020,

was set to expire on December 31, 2020. On October 1, 2020, based on additional 

information from the Fact Finding investigation and stakeholder interest, the 

Commission issued an Order extending the exemption until June 1, 2021.30

Following the positive response of Commission stakeholders to the temporary 

service contract filing relief, the Commission considered permanently establishing 

this exemption by amending its regulations. The Commission issued a Notice of 

Proposed Rulemaking (NPRM) on January 19, 2021, to make the exemption 

permanent.31 The Commission received eight comments on its proposed rule and 

on April 23, 2021, issued a final rule making the exemption permanent.32

3. Other Identified Challenges

Another challenge Innovation Team members identified was that the freight 

delivery system was struggling with prioritizing cargo so that urgently needed 

goods, especially personal protective equipment (PPE) and other medical 

equipment, would be given delivery priority. As noted previously, while general

demand decreased in the first quarter of 2020, the demand for medical equipment

dramatically increased. The challenge presented to the Teams was how to prioritize

cargo that was urgently needed and what to do with cargo that was not currently in 

demand. 

Marine terminals advised that they would be better able to manage cargo 

flows if they had specific, timely, and accurate information from shippers about 

which shipments contained PPE, which containers shippers were prepared to pickup, and which containers shippers would not be able to pick-up and must be stored

30 Order: Temporary Exemption from Certain Service Contract Requirements, Docket No. 20-06, 2020 

FMC LEXIS 206 (FMC Oct. 1, 2020).

31 NPRM: Service Contracts, Docket 20-22, 86 Fed. Reg. 5106 (Jan. 19, 2021). 

32 Final Rule: Service Contracts, Docket 20-22, 86 Fed. Reg. 21651 (Apr. 23, 2021). 
FACT FINDING 29 – FINAL REPORT 17

in off-dock storage. Some terminals had already set up hotlines or points of 

contacts by which shippers could identify containers containing PPE.

33

To foster the use of these methods of prioritization, on May 14, 2020, the 

Fact Finding Officer issued a press release that laid out steps shippers could take to 

mitigate COVID-19 impacts on the supply chain.34 Specifically, the Fact Finding

Officer informed shippers that MTOs could more effectively prioritize the 

movement of PPE cargo if they are better informed. The Fact Finding Officer 

encouraged shippers to share the following information with their MTOs: 

• Identify shipments that contain Personal Protective Equipment. These 

commodities must move first and MTOs need to know which containers 

to prioritize.

• Identify containers that shippers want to accept and can be prepared to be 

picked-up. This cargo must be moved to make more space for incoming 

shipments. 

• Identify containers that shippers are not able to accept or pick-up.

Terminals can more effectively store cargo if they know a shipper is not 

expecting to pick it up.

Ocean common carriers also stepped up in the early phases of the pandemic 

with innovative solutions to cargo that was not urgently needed. To avoid 

nonurgent cargo piling up at ports and slowing down the retrieval of urgently 

needed medical equipment, carriers offered to detour cargo destined for U.S. ports 

to other ports with available land for storage. Instead of charging demurrage or 

detention rates at U.S. ports, a much lower storage charge could be instead 

issued.35

In the May 2020 press release, the Fact Finding Officer noted that there was 

a similarly short list of key steps ocean carriers could take related to increase the 

33 See Press Release: COVID-19 Critical Cargo Initiative, (Apr. 17, 2020), 

https://www.apmterminals.com/en/los-angeles/practical-information/news-and-alerts/supplier-letter.

34 FMC Press Release: Fact Finding 29 Innovation Teams Identify Information Helpful to Mitigating 

COVID-19 Impacts on Supply Chain, (May 14, 2020), https://www.fmc.gov/Fact Finding-29-teamscovid-19-impacts-supply-chain/.

35 Many carriers instituted programs like this under various names including, “Suspension of Transit,” 

“Detention in Transit,” or “Delay in Transshipment.”
FACT FINDING 29 – FINAL REPORT 18

efficiencies of the freight delivery system.36 These key steps involved four issues 

identified in the initial Team meetings that offered the best chance to mitigate the 

challenges faced, including: 

• The impact of increased blanked sailings and skipped port calls;

• The impact of terminal closures and reduced hours;

• Confusion around ERDs and exporter cutoffs; and

• Increased difficulty in returning empty containers. 

As noted previously, one of the first notable effects of COVID-19 on the 

supply chain was a dramatic decrease in cargo volume. Carriers responded to the 

decline in volume by blanking sailings or bypassing ports to keep vessel supply 

matched to demand. Responding to both the change in vessel calls and the decline 

in demand, some terminals determined that the reduced cargo volumes did not 

financially justify maintaining full gate hours. Marine terminals also noted a need 

to adjust to new safety protocols which also resulted in reduced hours or 

unexpected closures. 

A concern grew among truckers and agricultural exporters that ocean 

carriers and marine terminals were not conveying vessel and terminal changes 

effectively. This was especially frustrating for agricultural exporters whose cargo 

must take several days to reach a port in a timely manner. Agricultural exporters

cited examples of their cargo being loaded onto trucks or rail only to be informed 

that the vessel on which they booked cargo was not arriving at that port. Similarly, 

drayage operators and shippers were frustrated with receiving last minute notice of 

terminal closures, which did not allow them to properly adjust their operations.

Fluctuations in volumes impacted every aspect of the supply chain and 

subsequently nearly every aspect faced some level of disruption. Changes to 

terminal operating hours, vessel schedules, and reductions in available storage 

36 Id. (“Commissioner Dye believes there is a similarly short list of key steps ocean carriers can take 

related to customer communications, business processes, and equipment logistics that will increase the 

efficiencies of the freight delivery system”).
FACT FINDING 29 – FINAL REPORT 19

space inevitably spilled over into conflicts with earliest return dates (ERDs) and 

exporter cutoffs.37

As vessel schedules fluctuated, the dates and times terminals would begin 

accepting containers for exports fluctuated. Unfortunately, if this information was 

not communicated clearly or promptly, it could lead to shippers dropping off cargo 

too early or too late. This was particularly an issue for agricultural shippers, whose

cargo may take several days to arrive at a terminal. Some agricultural shippers 

reported that their cargo was already in transit to the port when they were notified 

of a delayed ERD. Some truckers had to turn around and return the container to the 

shipper, while others had no option but to deliver the cargo early. Many inland 

shippers transport their cargo via rail and there was little that a shipper could do 

with a container on a rail line to stop the delivery of their container to the terminal. 

Furthering this frustration was a lack of clear guidance on where truckers 

and exporters could locate reliable ERD information. Exporters and truckers 

reported conflicting ERD information on marine terminal and ocean carrier 

websites. Without clear and accurate information, some frustrated exporters

resorted to checking every available resource on vessel arrivals and were forced to 

predict cargo availability. 

Additionally, exporters and drayage operators routinely expressed frustration 

with untimely notice when carriers’ empty containers were not being accepted at 

one terminal and drayage operators were directed to an alternative terminal. The 

complexity of the process is increased because carrier alliance members may call 

at multiple terminals. Not knowing which terminal may be accepting a particular 

empty container on a given day led some drayage truckers to book multiple 

appointments to ensure they had an appointment, further exacerbating process 

confusion.

37 The earliest return date is the first day a terminal will accept a container for export and an exporter 

cutoff is the last day a terminal will accept a container for export. If a container arrives too early, it may 

be subject to additional storage fees and if a container arrives to late, it may miss the vessel entirely and 

be rolled onto the next available vessel, incurring fees and penalties.
FACT FINDING 29 – FINAL REPORT 20

4. Ocean Common Carrier Innovation Team Meetings

The initial meetings with the nine Teams helped identify key areas that 

offered the best chance for action to mitigate the challenges faced because of the 

pandemic. At the end of April 2020, building on the information gathered in the 

initial Team meetings, the Fact Finding Officer reached out for insight and

cooperation of the major ocean carriers. Prior to these meetings, carriers were 

instructed to consider the four topics identified by the previous Innovation Teams 

as areas that offer a reasonable prospect for mitigation of the challenges the 

industry is facing. 

Four meetings were held between May 4, 2020, and May 7, 2020, during 

which all major ocean carriers participated.

38 Like all early Team meetings, these

groups met virtually. During these meetings, the Fact Finding Officer discussed the 

four remaining issues identified by the initial nine teams: 

• Confusion around ERDs and exporter cutoffs;

• The impact of terminal closures and reduced hours;

• The impact of increased blanked sailings and skipped port calls; and 

• Enhanced difficulty in returning empty containers.

With respect to ERDs, the Teams discussed the need for proactive 

communication and to ensure shippers have access to correct and current 

information. It was noted that this will require that carriers work with terminals to 

ensure the correct information is shared. In the event the dates conflict, one idea 

proposed by Team members was that carriers could agree to abide by the 

information published by the terminal. This guarantee would eliminate confusion 

and give shippers confidence that the information they rely on is correct. 

Team members also discussed how important it is that shippers have timely 

information about reduced terminal hours, terminal closures, blanked sailings, and 

bypassed ports. Due to the uncertainty present in the early stages of the pandemic,

it was important that shippers and truckers were given sufficient notice of reduced 

terminal hours, terminal closures, blanked sailings, and bypassed ports so that they 

38 See Appendix for a list of team participants. 
FACT FINDING 29 – FINAL REPORT 21

could prepare. Based on conversations with members of the industry, 7-day notice

for blanked sailings or terminal closures and 48-hour notice for bypassed ports 

could mitigate some of the problems shippers and truckers faced. All agreed that 

commercial solutions to this issue require carriers to work with marine terminals to 

ensure that proper notice is given. 

Lastly, during the meetings, Team members talked about the difficulties 

drayage operators and shippers have returning empty containers. Drayage 

operators expressed frustration about being denied access to terminals and being 

forced to travel to alternative locations to return empties. The group acknowledged 

that increased collaboration on this issue could result in improved clarity and 

efficiency. 

Following these meetings, the Fact Finding Officer routinely contacted the 

carrier participants to encourage progress and remain up to date on steps being 

taken to mitigate adverse effects on the supply chain. 

5. Regional Innovation Teams

As the volume and cargo handled at ports differ, so do terminal operations 

and local conditions. Conversations with team members during the first nine teams,

and in the meetings with carriers, demonstrated a need for a regional approach to 

the next part of the Fact Finding investigation. The Innovation Teams 

recommended that the Fact Finding Officer create teams to discuss challenges by 

specific port range. That recommendation was adopted, and over the following 

months, the Fact Finding Officer conducted regional team meetings specific to 

challenges in Southern California, New York/New Jersey, and New Orleans.

a. Southern California Team

The regional team discussions and interviews focused on the same four areas 

of concern that were identified in the earlier team meetings and included: (1) 

terminal gate closure notifications, (2) blanked sailings and bypassed port 

notifications, (3) export cargo receiving timelines (ERD), and (4) empty container 

returns (dual moves and chassis availability). Teams discussed the intricacies of 

these supply chain challenges and proposed ways to address them. 
FACT FINDING 29 – FINAL REPORT 22

Team members stressed that notice of terminal gate closures should be given 

no fewer than three days, and preferably seven days, before gate closings. At no 

time should a closure occur mid-shift. Advance notice of blank sailings should be 

given not only to beneficial cargo owners, but also be posted prominently on a 

carrier’s website, at least seven days in advance. Notice of bypassed ports should 

be posted at least three days in advance. Finally, carriers and terminals should 

collaborate more closely regarding export cargo receiving timelines with the goal 

of eliminating conflicting or confusing information.

With respect to empty container return practices, most Team members

agreed that the ideal approach would be to direct drayage operators to return 

empties to the terminal where they had picked up the loaded container. This would 

potentially allow the drayage operator to complete a dual move and reduce the 

number of chassis required. Other suggestions included: 

• Terminals refraining from cutoffs of empty returns mid-shift;

• Terminals adopting a goal of 7 days advance notice, but no fewer than 24 

hours, for empty cutoffs; and 

• Terminals allowing appointment-free returns during low use periods 

(such as night gates). 

The above actions by carriers and terminals could help, but Team members 

also acknowledged that there are actions shippers and truckers could also take to 

mitigate supply chain issues. First, shippers or truckers should promptly cancel any 

unused multiple bookings and terminal appointments to reduce “no show” rates 

and related inefficiencies. 

Blank sailings, port bypasses, and cancelled services increase shipper 

uncertainty about space availability. Increased uncertainty can lead truckers to 

make multiple bookings and related terminal appointments that compound existing 

inefficiencies. Unused bookings and appointments thwart planning and result in 

under-utilization of scarce assets. As soon as a shipper or trucker is aware that its 

extra bookings or extra terminal appointments will not be used, they should 

immediately notify their lines and terminals so that others can take advantage of 

those opportunities.
FACT FINDING 29 – FINAL REPORT 23

The approach and recommendations developed by this Team were published 

on the Commission’s website in the form of a press release.39 This approach was 

used in future conversations with regional Teams and throughout the later stages in 

the Fact Finding. Following the close of these meetings, the Fact Finding Officer 

and staff assigned to Fact Finding 29, continued to engage key industry leaders in 

Southern California about the progress they made in implementing four approaches 

to immediately address these critical operational issues.

b. North Atlantic Team

Following the success of the Team meetings on the West Coast, the Fact 

Finding shifted to concentrate on issues related to operations at the Port Authority 

of New York & New Jersey (PANYNJ) and surrounding facilities. For the North 

Atlantic region, three Teams consisting of drayage operators, terminal operators, 

shippers, intermediaries, and other parties critical to the movement of intermodal 

ocean cargoes through the PANYNJ facilities met in July 2020. These Teams 

discussed what operational adjustments will prepare the bi-state port complex for 

dealing with increasing cargo volumes.

The Teams began their efforts by assessing which, if any, of the four 

operational challenges identified during the examination of the San Pedro Bay 

ports may be applicable in the port of New York and New Jersey. Team members 

were also tasked with identifying other operational challenges to efficient port and 

supply chain operations and developing commercial solutions to address them.

Interviews with port users revealed that New York/New Jersey Port 

Authority leadership had responded effectively to the initial challenges that arose. 

Port users reported that because of this effort, facilities in the two states were 

working well. Especially helpful was the early and active intervention of port 

leadership with local and state governments. Also cited was the effectiveness of 

stakeholder cooperation under the Council on Port Performance (CPP).

One common challenge identified was the need to make progress in 

returning containers in a manner that facilitates a “double move.” Senior port 

39 FMC Press Release: Commissioner Dye Announces Findings of San Pedro Bay Discussions, (Jun. 17, 

2020), https://www.fmc.gov/commissioner-dye-announces-findings-of-san-pedro-bay-discussions/.
FACT FINDING 29 – FINAL REPORT 24

executives advised that achieving that goal was a high priority and the CPP was 

working to improve the process.40 The Fact Finding 29 team members 

recommended greater ocean carrier participation in port performance discussions 

as a step toward achieving better drayage outcomes, especially in returning 

containers.

In a press release dated August 4, 2020, the Fact Finding Officer revealed 

these findings and announced intent of shifting focus to the U.S. Gulf Coast.41 The 

Fact Finding Officer and staff members supporting the Fact Finding effort

continued to stay in touch with supply chain parties in the New York/New Jersey 

area to monitor and encourage improved efficiency and better communications.

c. Gulf Coast Ports Team

The third region incorporated into Fact Finding 29 was the U.S. Gulf Coast 

with a particular focus on the Port of New Orleans. Aside from challenges arising 

from disruptive hurricanes, users of the Gulf Coast ports expressed concerns with 

port channels, barge traffic, blanked sailings, and bypassed port calls. Stakeholders 

at Gulf Coast ports also raised issues with demurrage and detention charges and 

new charges for terminal appointments to return empty containers.

As rising cargo volumes increasingly put pressure on port and terminal 

performance, demurrage and detention charges increased. Shippers and trucking 

companies asserted that those increases often had little to do with creating effective 

incentives. They viewed such non-incentive charges as a forced subsidy for 

continued inefficiency. Again, as with the previous two regions, following the 

conclusion of the meetings, the Fact Finding Officer and staff remained in contact 

with stakeholders in the Gulf Coast region to monitor and encourage progress.

40 In May 2021, however, two of the largest trucking organizations in the Northeast suspended

their participation in the CPP, citing lack of carrier action taken on CPP recommendations. 

41 FMC Press Release: Commissioner Dye Completes Work in NY & NJ, Turns Attention to New Orleans, 

(Aug. 4, 2020), https://www.fmc.gov/commissioner-dye-completes-work-in-ny-nj-turns-attention-to-neworleans/. 
FACT FINDING 29 – FINAL REPORT 25

6. Memphis Innovation Team

The FMC Memphis Supply Chain Innovation Team (Memphis Innovation 

Team) was first established following the FMC Fact Finding Investigation 28 

meeting held in Memphis on May 15, 2018. This Team is comprised of shippers, 

ocean carriers, railroads, chassis pool contributors, and motor carriers, who 

volunteered to address the collective challenges in the Mid-South area in search of 

a better and more efficient supply chain process. Anything that is an unnecessary 

complicating factor adds confusion, delay, and unnecessary costs into the supply 

chain. Especially given extreme congestion involving ocean carrier haulage in rail 

heads during the pandemic, it is imperative that the Federal Maritime Commission 

and the Surface Transportation Board renew cooperation to alleviate this crisis.

On May 22, 2019, Commissioner Dye appeared before the Surface 

Transportation Board (STB), to discuss the recommendations of the Memphis 

Innovation Team. During this meeting, a white paper on the team’s efforts to 

improve supply chain velocity and fluidity at the rail ramps in Memphis and the 

Mid-South was submitted to the STB.

One of the Fact Finding 28 recommendations, adopted by the Commission 

on September 6, 2019, was that the Commission continue to support the Memphis 

Innovation Team in its efforts to improve the performance of the international 

ocean container freight delivery system.42 As a result, additional meetings were 

held in Washington D.C. on December 20, 2019, and January 22, 2020. Another 

meeting was held virtually on August 11, 2021. A recording of the meeting can be 

viewed online at: 

https://www.dropbox.com/s/z7zhgoreh17ya1n/FMC_2021.wmv?dl=0.

The white paper authored by the Memphis Innovation Team articulates the 

essential qualities of a high performing grey chassis pool that is essential for 

efficient chassis provisioning in the rail heads in Memphis. The qualities 

articulated in the white paper not only are essential for chassis provisioning in rail 

heads in Memphis, but also in other rail facilities and seaports around the country.

42 Fact Finding No. 28 Final Recommendation to the Commission, (Aug. 27, 2019), 

https://www.fmc.gov/wp-content/uploads/2019/09/FF28FinalReportLetter.pdf.
FACT FINDING 29 – FINAL REPORT 26

A copy of the white paper can be viewed online at: https://www.fmc.gov/wpcontent/uploads/2019/05/MemphisSupplyChainWhitepaper.pdf.

The expertise the Commission has developed surrounding the international

ocean supply chain gives the Commission a unique perspective on the extreme 

equipment dislocations that occur in Memphis rail heads, other rail facilities, and 

seaports around the country. The problems that exist in Memphis are worsening.

This is a matter of national significance and must be addressed for the United 

States to increase the performance of our international ocean supply chain. The 

Fact Finding Officer strongly recommends a reinvigorated focus on the critical 

equipment dislocations in Memphis and in other rail facilities and seaports around 

the country.

7. Other Approaches Considered

The Fact Finding Officer sought out ideas from the public and other 

organizations that presented ideas for alleviating challenges to the issues facing the 

international ocean supply chain. One such approach was developed by the 

Council on Port Performance (CPP). Established in June 2014 and led by the Port 

Department Director at The Port Authority of New York and New Jersey 

(PANYNJ) and the President of the New York Shipping Association (NYSA), the 

CPP provides guidance on programs and initiatives to improve efficiency and 

reliability at the Port of New York and New Jersey.43

At the request of the CPP, a working group of ocean carriers, trucking 

companies, marine terminal operators, shippers and third-party depot operators was 

formed to address growing concerns over empty container handling at the Port and 

to identify potential improvements to the current processes. The Empty Container 

Working Group’s discussions centered on ways to increase efficiencies through 

enhanced communications and advanced notifications. The group’s 

recommendations were presented to the CPP at their August 27, 2021, meeting and 

were overwhelmingly approved and endorsed by the Council.

43 Council on Port Performance, Port of New York and New Jersey, https://www.panynj.gov/port/en/ourport/council-on-port-performance-.html, (last visited May 17, 2022).
FACT FINDING 29 – FINAL REPORT 27

The group recommended that dual transactions should be exploited as often 

as possible, and truckers should be directed to return empties to the terminal where 

they were picked up. If this is not possible, the Empty Container Working Group 

identified other steps that marine terminal operators and ocean common carriers 

can take to improve the empty container return process: 

• All terminals, depots, and carriers should publish the next day’s empty 

container return information no later than 1:00 PM daily; and

• If the return location changes overnight, truckers should not be turned 

away from a terminal or depot with an empty of the type that was 

identified as allowable on the return information published the day 

before.

There were additional suggestions that were presented to further achieve 

efficiency with empty container handling once the initial recommendations were

addressed. These included: 

• Terminal and carrier computer systems should be synchronized;

• Carrier customer service hours should be aligned to terminal and depot 

hours of operation;

• Terminals that typically require appointments should allow appointmentfree empty returns during low use periods;

• Off terminal depots should limit the number of carriers directing empties 

to the same location in a single day;

• Off-hire boxes should automatically be given extra time (i.e., 10 days) to 

allow scheduling for delivery to locations outside of the port district; and

• Ocean carriers should hire a drayage trucker to reposition empties where 

their business needs direct them to be, rather than imposing this task, that 

was not contractually negotiated, onto the motor carrier.

This approach was presented to later Fact Finding 29 Team members and 

used to develop ideas for commercial solutions. 

D. Phase Two – Information Gathering

Fact Finding 29 transitioned into its second phase in November 2020. During 

the first and second phases of Fact Finding 29, the Fact Finding Officer held over 
FACT FINDING 29 – FINAL REPORT 28

20 team meetings with 80 different participants representing shippers, carriers, 

ports, terminal operators, ocean transportation intermediaries, drayage providers, 

and trade associations. The Fact Finding Officer also spoke to hundreds of 

stakeholders through virtual speeches, meetings, phone conversations, and emails.

Throughout the process, both the Fact Finding Officer and Commission staff 

assigned to the Fact Finding routinely followed-up with Team participants and 

stakeholders in the areas reviewed above. These frequent check-ins with Team 

members located in key areas of the United States allowed the Fact Finding Officer 

to stay abreast of changes in the challenges and, on some occasions, to witness 

improvements. 

While the industry continued to struggle with some issues, during the Fall of 

2020, Team members noted improvement with some of the key issues identified 

early in the Fact Finding and two of the original four issues identified in the initial

team meetings had greatly dissipated by the end of 2020. 

In the early stages of the pandemic, blanked sailings were a significant issue 

on the west coast and in some southern Atlantic ports. As the months progressed, 

check-ins with Innovation Team members revealed improvement on this issue. 

However, the Fact Finding Officer remains concerned that blank sailings are 

interfering with customer service and recommends Innovation Team meetings to 

develop coherent blank sailing processes.

Similarly, in the early stages of the pandemic, there were significant issues 

with terminal closures and reduced hours. However, over the following months, 

issues with unexpected terminal closures also diminished, in part because the 

industry adjusted to new volumes and in part because safety and health procedures 

were standardized and normalized. In cases where there was still disruption to 

terminal schedules, shippers and drayage operators noted that timely conveyance 

of this information had improved. 

Other issues, however, remained outstanding and, in some cases, 

deteriorated. Stakeholders using the Port of New York and New Jersey, the Port of 

Los Angeles, and the Port of Long Beach expressed growing concern with carrier

practices regarding shifting ERDs, the return of empty containers, export cutoffs,

and how these issues were leading to increased demurrage and detention invoices. 
FACT FINDING 29 – FINAL REPORT 29

Some stakeholders also stated that increasingly, demurrage and detention charges 

were not being administered in a manner consistent with the Incentive Principle as 

articulated by the FMC’s Interpretive Rule under section 41102(c) of Title 46, 

United States Code.

1. Supplemental Order

Based on information obtained in the Fact Finding and coverage in the trade 

press, the Commission began growing increasingly concerned that vessel-operating 

common carriers in alliances who call on the Port of New York and New Jersey, 

the Port of Long Beach, and the Port of Los Angeles may be employing practices 

and regulations that violate 46 U.S.C. § 41102(c). 

Acting on this concern, on November 20, 2020, the Commission approved a 

Supplemental Order for Fact Finding 29.44 The Supplemental Order emphasized 

the Commission’s concern with reports coming out of the Port of Los Angeles, 

Port of Long Beach, and Port of New York and New Jersey, and endorsed the 

efforts by the Fact Finding Officer, under the authority existing in the March 31, 

2020 Order, to investigate whether alliance carriers who call on those ports were

employing practices or regulations in violation of § 41102(c).45 The Supplemental

Order identified three issues in particular that warranted additional scrutiny, 

especially given the rapid increase of trade volumes. These issues included: 

• Container return practices – in particular, practices that impact the 

efficient drayage of empty containers to marine terminals for carrier

pickup;

• Demurrage and detention practices – specifically whether carriers’ 

policies, practices, and procedures align with the principle, central to the 

Commission’s Interpretive Rule on demurrage and detention, that 

detention and demurrage charges and policies should serve the primary 

purpose of incentivizing the movement of cargo and promoting freight 

fluidity; and

44 Order: International Ocean Transportation Supply Chain Engagement - Possible Violations of 46 

U.S.C. § 41102(c), (Nov. 19, 2020).

45 Id. at 2.
FACT FINDING 29 – FINAL REPORT 30

• Practices related to container availability for U.S. exports – in 

particular, reports that carriers were declining to ship U.S. agricultural 

commodity exports.

The Supplemental Order signaled a transition in the focus of the Fact 

Finding 29 investigation. The initial focus in Fact Finding 29 was on commercial 

solutions.46 This Supplemental Order signaled a shift in focus and an intensified

effort to gather information and act on violations of the Shipping Act of 1984, as 

amended. As noted in the Supplemental Order, “the Fact Finding Officer’s 

authority includes the ability to issue...compulsory information demands under 46 

U.S.C. § 40104.”47

2. Fact Finding 29 Emails 

In the first Fact Finding 29 press release, the Fact Finding Officer stated that 

“individuals wishing to provide information to Commissioner Dye may do so by 

writing to ff29@fmc.gov.”48 During the first phase of the Fact Finding, most of 

these emails were either individuals wishing to participate in teams or offering to 

share general news or information. 

When the Commission issued its Supplemental Order announcing a focus on 

potential violations of the Shipping Act, individuals began using this email address 

to report potential violations. Commission staff assigned to Fact Finding 29 sorted 

through and categorized these emails. 

The most common concern received in the FF29 email inbox involved 

demurrage or detention charges resulting from an inability to return containers. 

Issues involving confusion or problems with earliest return dates or export cutoffs 

also made up a significant number of emails received. These emails were 

ultimately forwarded to the FMC’s Bureau of Enforcement (BOE) and the 

46 85 Fed. Reg. 19146 at 19147 (Apr. 6, 2020).

47 Id. 

48 Press Release: Commissioner Dye Leading FMC Initiative to Address Urgent COVID-19 Supply Chain 

Impacts, (Mar. 31, 2020) https://www.fmc.gov/dye-leading-fmc-initiative-address-urgent-covid-19-

supply-chain-impacts/.
FACT FINDING 29 – FINAL REPORT 31

Commission’s area representatives where they were evaluated for potential 

enforcement action. 

3. Advice to the Trade

In addition to the information demands issued in early 2021, the Fact 

Finding Officer also solicited information from the public regarding alleged 

violations. On December 17, 2020, shortly after the issuance of the Supplemental 

Order, the Fact Finding Officer issued a press release titled, “Fact Finding 29: 

Advice to the Trade.” In this press release, the Fact Finding Officer advised 

shippers and drayage operators to contact the FMC’s Bureau of Enforcement 

(BOE) with allegations of ocean carriers and marine terminal operators employing 

practices or regulations in violation of 46 U.S.C. § 41102(c).

49

The Fact Finding Officer advised that shippers and truckers could contact 

the BOE with allegations of ocean carriers and marine terminal operators 

employing practices or regulations in violation of 46 U.S.C. § 41102(c) involving 

non-compliance with the Final Rule published earlier this year by the agency that 

addresses detention and demurrage. Reports of allegations should typically be 

directed to area representatives; however, to facilitate the immediate need and gain 

understanding of the issues, individuals with specific allegations of behavior that 

violates 46 U.S.C. § 41102(c) were instructed to submit their complaint and 

supporting evidence to the BOE by writing boe@fmc.gov.

50

4. Information Demands

The Supplemental Order reemphasized that “the Fact Finding Officer’s 

authority includes the ability to issue compulsory information demands under 46 

U.S.C. § 40104.”51 On February 17, 2021, in an additional effort to gain 

information on the practices of carriers and terminals and to determine if legal 

obligations related to detention and demurrage practices were being met, the Fact 

49 FMC Press Release: Fact Finding 29: Advice to the Trade, (Dec. 17, 2020), https://www.fmc.gov/Fact 

Finding-29-advice-to-the-trade/. 

50 This email address was provided in part to curb the ongoing emails being sent to ff29@fmc.gov. 

Despite this press release however, the FF29 inbox continued to receive email complaints which were 

forwarded to BOE. 

51 85 Fed. Reg. 19146 at 19147.
FACT FINDING 29 – FINAL REPORT 32

Finding Officer announced that information demands would be issued to ocean 

carriers and marine terminal operators (MTOs).52

On March 8, 2021, the Fact Finding Officer served 26 Information Demand 

Orders.53 The information demands sought additional information on a variety of 

subjects including empty container return and ERDs, two of the original four issues 

identified by the early work of the Innovation Teams. These information demands 

resulted in thousands of pages of answers and documents. Commission staff 

reviewed and categorized the information received and, on several occasions, 

sought clarifying information from carriers and MTOs. 

The information demands covered a variety of subjects related to demurrage 

and detention and export procedures. For example, the information demands 

inquired on system changes in light of the Interpretive Rule on demurrage and 

detention charges, empty container return practices, earliest return date practices,

and ideas for innovation and improvement. The information demands also 

requested information about export container availability and to ensure that the 

Fact Finding Officer was fully informed on agricultural export issues, a letter was 

also sent to the carriers providing them with the opportunity to respond to these 

complaints and media reports in May 2021. 

a. Demurrage and Detention

The information demands asked questions on how carriers and MTOs 

changed their practices or policies on demurrage and detention since the issuance 

of 46 C.F.R. § 545.5. Many identified actions included clarifying terminology and 

procedures on websites, providing more information, simplifying dispute 

resolution policies, and making practices more consistent with the Interpretive 

Rule on Demurrage and Detention. Several others noted changes to their 

calculation metrics, such as, which days count toward free time.

The information demands also asked questions on how demurrage and 

detention was collected since the issuance of the Interpretive Rule. Unfortunately, 

52 FMC Press Release: Information Demand on Detention & Demurrage Practices to Be Issued, (Feb. 17, 

2021), https://www.fmc.gov/information-demand-on-detention-demurrage-practices-to-be-issued/.

53 In total, 26 orders were served seeking information from 10 ocean common carriers and 16 MTOs.
FACT FINDING 29 – FINAL REPORT 33

evaluating the impact of the Interpretive Rule proved difficult in reviewing the 

information demands. The issuance of the Interpretive Rule on Demurrage and 

Detention coincided with the COVID-19 pandemic lockdown in the United States.

This makes it challenging to disentangle the effects of the Interpretive Rule from 

the effects of the pandemic. Most carriers and MTOs do not track free time 

extensions granted, and thus, it was difficult to evaluate how carriers and MTOs 

mitigated demurrage and detention. 

b. Empty Container Return

Commission concerns about empty container returns are not new. In the 

Commission’s 2019 Notice of Proposed Rulemaking on demurrage and detention, 

the Commission stated that under the “incentive principle,” if empty containers 

cannot be returned due to a lack of appointments, demurrage and detention cannot 

incentivize equipment return.54 The Commission went on to propose that “[a]bsent 

extenuating circumstances, practices and regulations that result in detention being 

imposed when a container cannot be returned weigh heavily in favor of a finding 

of unreasonableness.”55 The Commission reiterated these principles in its final rule 

on demurrage and detention, which states that: “Absent extenuating circumstances, 

practices and regulations that provide for imposition of detention when it does not 

serve its incentivizing purposes, such as when empty containers cannot be 

returned, are likely to be found unreasonable.”56

However, trucker complaints about difficulties in timely returning empty 

containers persisted after the Commission published its Interpretive Rule and 

increased in light of supply chain disruptions associated with the COVID-19

pandemic. The information demands sought information from carriers and 

terminals on notification processes for empty container return and impediments to 

empty container return. Specifically, how much notice is given regarding return 

policies and what happens when inadequate notice is given. These two areas were 

54 NPRM: Interpretive Rule on Demurrage and Detention Under the Shipping Act, 84 Fed. Reg. at 48852 

(Sept. 17, 2019).

55 Id. at 48853 (“imposing detention in situations of uncommunicated or untimely communicated changes 

in container return location also weighs on the side of unreasonableness, as might doing so when there 

have been uncommunicated or untimely communicated notice of terminal closures for empties”).

56 46 C.F.R. § 545.5(c)(2)(ii). 
FACT FINDING 29 – FINAL REPORT 34

identified in both the Team meetings in 2020 and through follow up conversations 

with stakeholders.

i. Empty Container Return Notification

During the Team meetings, drayage operators and shippers raised concerns 

over the notice provided about where to return an empty container. Reported

frustrations included receiving last minute notice of changes to which terminals 

were receiving empties and difficulty in determining where to return empties. 

Some even claimed that there were periods where no return location would be 

available at all. 

Through the information demands, the Fact Finding Officer sought to 

determine whether carriers were operating under standard practices and what was 

preventing notice from reaching its intended audience. MTOs largely said that they 

were not in a good position to provide information about the processes of empty 

container return because containers are carrier equipment, not terminal equipment, 

and detention charges are imposed by carriers, not MTOs. Furthermore, they stated 

that carriers determined when to begin and when to stop receiving equipment. 

Carriers generally acknowledged their responsibility, but the answers 

demonstrated regional approaches for dealing with notifying drayage operators and 

shippers of return locations. Operations on the east coast typically relied on the 

terminals to notify shippers and drayage operators of changes to return locations. 

On the west coast, carriers relied on processes like E-Modal or Pier PASS to notify 

shippers or drayage operators of return locations or changes to return location. In 

addition, west coast MTOs generally broadcast empty container return information 

on their website, terminal system, or through blast email notifications.

Every ocean carrier who received an information demand stated that it 

provides notice to the terminal57 by at least 4:00 pm the day before and many 

claimed to provide even more notice, including giving several days’ notice of 

return locations. This 4:00pm deadline is derived from the Uniform Intermodal 

Interchange and Facilities Access Agreement (UIIA) which requires that carriers 

57 As noted above, the carrier then relies on the terminal to broadcast this information.
FACT FINDING 29 – FINAL REPORT 35

post container return locations by 4:00pm the day prior.58 Additionally, the UIIA 

states that the default equipment return location is the location at which it was 

picked up, unless the carrier directs otherwise. If a carrier does not provide notice 

of return location by 4:00pm, the UIIA provides that a trucker is entitled to one 

extra business day to return equipment.59

ii. Empty Return Impediments

In their responses, carriers acknowledged that there are instances where they 

are unable to provide notice of empty container return information by 1:00pm or 

4:00pm. They also acknowledged that there may be situations where there are no 

available empty container return locations, but universally stated that multiple days 

without return locations are rare. As noted above, in these cases, the UIIA would 

require the extension of free time. When this happens, carriers stated that 

additional free time is granted on a case-by-case basis. 

Every carrier stated if a party wishes to dispute a detention charge incurred 

because no return locations were available, they do not need to pay that charge 

first. Every carrier also claimed to grant free time extension when return locations 

are unavailable on a case-by-case basis. This case-by-case language was common 

in answers regarding disputes and demonstrated that in terms of resolving issues, 

there is a wide range of approaches carriers take. 

For example, MTOs were asked what would happen if a drayage operator is 

in line to return a container only to have the return location change. MTOs 

presented two different solutions. Some said they would issue a trouble ticket and 

the trucker would need to dispute any charges with the carrier. Others said they 

would honor the appointment regardless.60 These responses not only demonstrated 

58 Uniform Intermodal Interchange and Facilities Access Agreement, § E,1, b (“Whenever a return 

location is changed, Provider must notify the Motor Carrier by e-mail by 16:00 p.m. local time the 

business day prior to the change becoming effective.”).

59 Id. at § E.1.d (“Should the notification required under subsection 1.b. above not be made one (1) 

business day prior to the effective date of the change, and the late notification delayed the Interchange of 

Equipment, then the Motor Carrier would be entitled to one (1) additional business day to return the 

Equipment.”).

60 Still others avoided the question entirely and said such a situation never happens. 
FACT FINDING 29 – FINAL REPORT 36

the variety of approaches operators take, but also provided insight into the need for 

greater coherence of operational processes concerning empty container return.

Most MTOs said that they have no control over container detention charges 

or free time extensions related to empty container returns. However, some of these 

MTOs indicated that they will accept an empty return if the trucker has a 

confirmed appointment. Others said they could only issue a trouble ticket so that 

the drayage operator had proof of the issue when disputing detention charges with 

a carrier. 

The information demands also asked for policies and procedures regarding 

the use of dual moves. Commission stakeholders from all aspects of the industry 

have repeatedly spoke of merits of dual moves and they have been widely 

recognized as a solid method of alleviating congestion. In situations in which a 

drayage operator does not have a dual move and they are required, dual moves can 

be an impediment to the return of an empty container. Thus, the Commission has 

strongly encouraged the use of dual moves, while allowing flexibility for truckers 

to return an empty if a dual move is not possible.

While most MTOs allowed dual moves, few had programs or policies that 

actively encouraged or incentivized their use. Of the MTOs that did encourage dual 

moves, a common method of encouraging or incentivizing dual moves involved

easing or removing appointment requirements for dual moves. One MTO said that 

it would accept empties even if was over a carrier’s quota or it was part of a dual 

move. Nearly all MTOs stated that they recognized the benefits of dual moves.

In sum, the information demands shed some light on the frustration shippers 

and drayage operators noted regarding notice of where and when empty containers 

can be returned. It appears that there is a lack of consistency across the United 

States with respect to the return of empties and it is not always clear who is 

responsible for communicating return locations. While carriers are taking strides to 

communicate the information to shippers and drayage operators, there remains a 

disconnect over who is ultimately responsible for sharing the correct information 

and how timely the information is shared.
FACT FINDING 29 – FINAL REPORT 37

c. Earliest Return Dates

One enduring issue for exporters throughout the Fact Finding was with

Earliest Return Dates (ERDs). The information demands asked how carriers 

provided notice to exporters/drayage truckers of blanked sailings, bypassed ports, 

or changes to earliest return dates, and how carriers mitigated the effects of those 

events to exporters and drayage truckers. MTOs were similarly asked whether they 

post information about earliest return dates and vessel schedules on their website. 

Though all carriers claimed that they communicated vessel schedule or ERD 

information to their customers, as with empty container return, responses indicated 

a large array of methods being employed to communicate information. 

A relatively small number of carriers stated that they do not actively notify 

shippers of changes, instead, these carriers rely on shippers and drayage operators 

to check the carriers’ websites to determine if any changes have taken place. Some 

carriers distinguished ERD issues from blanked sailing or bypassed port issues and 

said for ERD concerns, customers need to check with MTOs.

In contrast, other carriers send push notifications or other form of active 

notice to customers when there are changes to vessel schedules or ERDs. One 

carrier said, in addition to website updates and push notifications, it also sends 

emails describing and explaining any changes to ERDs. In addition to enhanced 

notification systems, two carriers also provide updated bookings in the event there 

is a blanked sailing or bypassed port. These carriers will automatically update 

bookings and make alternative plans for shipments already confirmed for the 

vessels impacted by blanked sailings or bypassed ports. MTOs uniformly stated 

that they post information about vessel schedules on their websites, but that this 

information comes from the carrier or is based on information provided by the 

carrier. 

All carriers said that they would mitigate export demurrage or detention 

charges caused by changes in vessel schedules and ERDs. About half 

automatically account for vessel schedules or ERD changes in assessing demurrage 

and detention and will preemptively extend free time or waive demurrage or 

detention without issuing an invoice and without requiring additional action by the 

shipper or trucker. Other carriers said that they required the customer to act before 
FACT FINDING 29 – FINAL REPORT 38

mitigating charges related to schedule changes. Most carriers will extend free time 

by the same number of days the vessel schedule is delayed. 

These findings suggest a variety of methodologies being employed to 

communicate ERD information to shippers and truckers and supports the need for 

greater clarity in ERD practices.

d. Innovation Ideas

Finally, carriers were also asked what other solutions (e.g., container depots, 

collapsible containers, or new carrier offerings) could improve the availability of 

containers for exports. Many carriers suggested the use of container depots which 

could mitigate some of the bottlenecks currently experienced. A few others 

discussed a need for increased supply, including increased container supply or 

increased rail capacity. Some also noted innovative ideas such as collapsible 

containers which would allow multiple empty containers to be loaded on a vessel.

Carriers also had suggestions for things that shippers, truckers, and MTOs 

could do to improve container flow. These included, for example, shippers pooling 

facilities to facilitate export loading; increasing the size and operating hours for 

distribution centers and terminals; and improving technology. 

e. Container Availability

Questions about the availability of containers for export and, in particular, 

agricultural exports, were asked through the information demands and additional 

letters sent to carriers. Carriers emphasized that the driver of cargo from Asia to 

the U.S. is a demand surge from U.S. consumers. Consequently, carriers stated, 

they must reposition equipment from the U.S. to Asia to meet their contractual 

obligations to U.S. importers. Many carriers reported that exports increased from 

2019 to 2022. Some carriers further suggested that because of exceptional 

conditions caused by the COVID pandemic, there were competing demands for the 

same empty container supply. One carrier noted the historically peak import season 

(August – October) does not coincide with peak agricultural export season 

(November – March). But in 2020 and the beginning of 2021, import peak volumes 

were sustained beyond traditional peak periods, which changed network 

calculations.
FACT FINDING 29 – FINAL REPORT 39

Carriers stated that they do not fill their ships entirely with loaded export 

containers on the backhaul voyage from the U.S. to Asia. This is in part due to 

safety considerations, commercial considerations, and congestion considerations. 

Many carriers noted that because agricultural exports are relatively heavy, they 

must be balanced with containers loaded with lighter cargo or with empty 

containers.

5. Supplemental Carrier and Marine Terminal Innovation Teams

There were four primary issues initially identified by the original nine 

Teams. Of these four, two were resolved in the first phase of the Fact Finding, but 

two others have persisted throughout, namely issues with the return of empty 

containers and issues with earliest return dates. Using the information gathered 

over the last two years, in late 2021 and early 2022, the Fact Finding Officer 

convened team meetings with carriers on an alliance-by-alliance basis, together 

with their terminal partners, to explore commercial solutions to these two 

outstanding issues. 

These Teams met between November 2021 and February 2022 and 

discussed potential commercial solutions to lingering issues with ERDs and empty 

return. Teams explored some of the previous proposals on these issues identified 

by the Fact Finding and by the CPP. Ultimately through these meetings, a new 

framework was developed by the Fact Finding Officer that emphasized coherence 

at the ports. This framework was presented to the Teams for their thoughts on its 

feasibility. 

With respect to container return, the emphasis was on creating a reliable 

container return process. Specifically, containers should always be allowed to be 

returned to the originating terminal, regardless of whether other locations are 

available, operations should emphasize and encourage the use of dual moves. 

When, in rare cases it is not possible to return a container to the terminal of 

original pickup, notice should be received by at least 1:00pm the day before and 

requirements for appointments at the new terminal should be waived. 

With respect to ERDs, the emphasis was on improving certainty for 

exporters. Specifically, confirming that the carrier is responsible to communicate 
FACT FINDING 29 – FINAL REPORT 40

the ERD to shippers, but MTOs and carriers will communicate to establish reliable 

ERD information for exporters. In rare cases in which a terminal cannot honor the 

original ocean common carrier’s ERD or on occasions where a vessel is delayed 

after an export container is delivered to the terminal in accordance with the 

carrier’s ERD, the carrier and terminal will not invoice or otherwise charge export 

demurrage to the shipper.

Like previous proposals from the Fact Finding and from outside, team 

members had mixed reactions to the effectiveness of these proposals. Some 

questioned the feasibility of incorporating these changes during this time of 

extreme congestion in seaports and terminals. 

III. FACT FINDING OFFICER CONCLUSIONS FROM PHASE I 

AND PHASE II

A. International Ocean Freight Pricing and Market Analysis

1. Background

Over the course of Fact Finding 29, the focus of the investigation has shifted 

to meet new demands and respond to the interests and needs of stakeholders. One 

area of increased concern is the increased price of ocean shipping in the wake of 

the pandemic. Ocean shipping freight rates have risen dramatically in the last two 

years. The average spot market price of shipping a 40-foot container hovered 

around $1,500 in the first week of May 2020, reached a peak of $11,109 in

September 2021, and in spring 2022, are near $9,000.61 This average increase in 

prices has strained exporters and importers and the Fact Finding Officer is aware 

and acknowledges concerns that have been both raised by shippers and reported in 

the trade press. 

61 Figures were taken from the Freightos Baltic Index (FBX): Global Container Freight Index. Available 

online at: https://fbx.freightos.com/. 
FACT FINDING 29 – FINAL REPORT 41

Freight rates for ocean shipping are subject to volatility.

62 Supply and 

demand fluctuates on an annual and seasonal basis, and due to external events. 

Notwithstanding the nature of freight rates, as discussed throughout this report, the 

effects of the COVID-19 pandemic were evident in the global supply chain quickly 

and intensely. 

Consumer spending also was dramatically impacted by the change in 

circumstances.63 As people stayed home and governments imposed lockdowns and 

restrictions, consumer spending on goods, particularly through e-commerce, rather 

than services, surged in the fall of 2020.64 This increased demand overwhelmed

limited supply, which was further affected by other COVID-19 impacts, such as 

government restrictions and decreased workforces because of illness.65 Supply 

chain congestion globally further decreased the available supply of ship capacity 

and container availability for exporters and importers.

62 Fernando Leibovici and Jason Dunn, The Dynamics of International Shipping Costs, Federal Reserve 

Bank of St. Louis, (Jan. 3, 2022), https://www.stlouisfed.org/on-the-economy/2022/january/dynamicsinternational-shippingcosts#:~:text=A%20salient%20feature%20of%20the,in%20the%20week%20of%20Feb (last visited May. 

17, 2021)(“Our first observation is that international shipping costs are volatile. Their deviations from 

trend prior to COVID-19 range from -26.8% to 19.0%, with a standard deviation of 12.8%. Thus, even 

though recent changes of international shipping costs stand significantly above this range, it is important 

to note that seaborne shipments typically feature significant price swings even outside crisis episodes.”).

63 Id. (“These sharp changes in international shipping costs are partially in response to the COVID-19

economic environment. Unprecedented levels of fiscal stimulus, combined with a sharp reallocation of 

demand from services into durable goods, have been straining supply chains, leading to the resurgence of 

inflation across developed economies. Given that durable goods are particularly likely to be traded 

internationally, these developments have led to the increased demand for international shipping services 

and, thus, to the rise of international shipping costs.”).

64 See United Nations Conference on Trade and Development, Review of Maritime Transport 2021, 

https://unctad.org/system/files/official-document/rmt2021_en_0.pdf.

65 United Nations Conference on Trade and Development, High freight rates cast a shadow over 

economic recovery, (Nov. 18, 2021), https://unctad.org/news/high-freight-rates-cast-shadow-overeconomic-recovery (“This large swing in containerized trade flows was met with supply-side capacity 

constraints, including container ship carrying capacity, container shortages, labour shortages, continued 

on and off COVID-19 restrictions across port regions and congestion at ports. This mismatch between 

surging demand and de facto reduced supply capacity then led to record container freight rates on 

practically all container trade routes.”).
FACT FINDING 29 – FINAL REPORT 42

Even as COVID-19 cases dropped, vaccines became available, and the 

impact of the pandemic was less pronounced at ports and with supply chain actors, 

the supply remained outmatched by the demand.66

2. Commission Competition Enforcement and Shipping Act 6(g) 

Standard

The number of major carriers in the U.S. transpacific and Atlantic trades has 

decreased from 20 in 2015 to 11 by 2022, due to ocean carrier mergers and the 

bankruptcy of one major carrier.

67The Federal Maritime Commission and the 

Department of Justice have a statutory division of competition authority over 

international liner shipping in the U.S. trades. The Department of Justice reviews 

and approves mergers of ocean carriers.68 The Federal Maritime Commission 

analyzes the competitive market effects of collaborative agreements among 

competitors, such as vessel sharing agreements (alliances are vessel sharing 

agreements that operate globally) or joint ventures. It is noted that market 

concentration results from mergers, not from the market effects of collaborative 

agreements among competitors. 

While it is characterized as an “exemption,” the Shipping Act of 1984 is not 

an exemption from the antitrust laws, but an alternative competition regime put in 

place by Congress in recognition of the multinational nature of international ocean 

66 In response, ocean carriers are responding to the imbalance between supply and demand by ordering of 

new vessels. Through this investment, carriers are responding to the lack of supply. While ultimately 

these orders will increase supply, it will be sometime before their effects are felt due in part to the time 

necessary to produce new vessels and the time it will take for the market to feel their effect.

67 The ocean carrier consolidation and bankruptcy since 2014 include:

CSAV and Hapag-Lloyd merger (2014);

COSCO and China Shipping merger (2016, announced in 2015 but not completed until Feb. 2016);

Hanjin bankruptcy (2016);

CMA CGM purchase of APL through acquisition of NOL (2016);

Maersk purchase of Hamburg Sud (2017); 

COSCO purchase of OOCL (completed 2018, announced 2017);

Hapag-Lloyd/UASC merger (2017); and

MOL/K Line/NYK joint venture as ONE (2017/2018).

68 The Fact Finding Officer believes that the most wholistic approach would be to include ocean carrier 

merger activity under the FMC, similar to railroad merger activity which is overseen by the Surface 

Transportation Board.
FACT FINDING 29 – FINAL REPORT 43

shipping and importance of working with our international trading partners in this 

arena. The Federal Maritime Commission, with its specialized knowledge and 

expertise, is the agency responsible for administering this alternative competition 

law. The competition standard in the Shipping Act of 1984, as amended, 46 U.S.C. 

§ 41307(b)(1), is modeled on the same laws administered by the Department of 

Justice.69 The basic framework for initial analysis aligns with established 

guidelines used for evaluating collaboration among competitors and is performed 

by economists and industry analysts who are experts in the ocean transportation 

system.70

Agreements that may pose competitive concerns are subject to continuous 

monitoring by Commission staff. The Commission validates the data and 

information collected through our monitoring with external sources of information 

on ship schedules, capacity, and measures of cargo moved. The FMC also 

regularly reviews and revises monitoring data to ensure that the data collected 

aligns with the realities of the industry. During the pandemic, “blank sailings” 

were a particular concern because of their potential to be used for anti-competitive 

purposes. Our monitoring, however, indicated that this reduced service by ocean 

carriers was driven by port congestion rather than a desire to reduce capacity, and 

delays and skipped ports have been a frequent occurrence. The Commission staff 

have adjusted the data collected on blank sailings to provide additional detail on 

the factors driving schedule delays and blanked sailings.

There are three global alliance agreements on file with the Commission: 2M, 

OCEAN, and THE. These agreements contain authority for the carriers to share 

vessels, exchange space, and coordinate scheduling and utilization, among other 

provisions. These are the most heavily monitored carrier agreements, due to the 

potential anticompetitive impacts from their authority to efficiently use their 

69 Section 6(g) of the Shipping Act of 1984, 46 U.S.C. § 41307(b)(1), is modeled on the Hart-ScottRodino Antitrust Improvements Act of 1976 which amended the Clayton Act to require companies to file 

premerger notifications with the Federal Trade Commission and the Antitrust Division of the Justice 

Department for certain mergers and acquisitions.

70 Federal Trade Commission and Department of Justice, Antitrust Guidelines for Collaborations Among 

Competitors, (April 2000), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venturehearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf.
FACT FINDING 29 – FINAL REPORT 44

resources. As of May 5, 2022, the three global ocean carrier alliances and each of 

their member companies will now be required to provide enhanced pricing and 

capacity information. Additional agreement changes may be required by the 

Commission to alleviate competition concerns as warranted.

3. Market Analysis

Though there have been charges of illegal activity or concerns of market 

concentration driving increased ocean freight costs, the Fact Finding Officer’s 

assessment is that our transpacific market is not concentrated and that the increased 

rates in that market are a result of an extreme spike of consumer demand in the 

United States that overwhelmed the supply of ship capacity. Similarly, the U.S. 

Atlantic market for ocean shipping is barely concentrated, and increased rates in 

that market are also a result of overwhelming U.S. demand.71 Furthermore, a 

reassuring data trend indicates that the individual ocean carriers within each 

alliance continue to compete on pricing and marketing independently and 

vigorously. Individual ocean carriers within alliances continue to add and withdraw 

vessels from trades both inside and outside the alliances in which they participate 

and, particularly in the transpacific, new entrants have been entering the trade. The 

transpacific is a highly contestable market.

Using the Herfindahl–Hirschman Index (HHI) the Commission’s Bureau of 

Trade Analysis has found that the transpacific markets are competitive and have 

been for some time. In fact, moving beyond HHI, the fact that the non-alliance 

share in the transpacific increased throughout 2021 provides further evidence of 

competition in that market. The transatlantic numbers are slightly higher in terms 

of HHI, indicating a moderately concentrated market over the past year, but is at 

the very bottom of that range. 

The Commission has ongoing contact with our international ocean liner 

competition partners. Competition officials of the European Union, China, and the 

71 Similar conclusions have been reached by European counterparts. See Peter Thomsen, EU rejects cartel 

charges against carriers, ShippingWatch, (Feb. 2, 2022), 

https://shippingwatch.com/regulation/article13757511.ece#:~:text=The%20European%20Commission%2

0denies%20allegations,alliances%2C%20states%20spokesperson%20to%20ShippingWatch, (last visited 

May 17, 2022) (“It was concluded that so far no evidence of anti-competitive behavior from shipping 

alliances aimed at increasing freight rates has been identified”). 
FACT FINDING 29 – FINAL REPORT 45

Federal Maritime Commission regularly discuss our ocean shipping markets and 

we have, to date, observed no indication that the current prices for liner shipping 

are a result of collusive or illegal conduct on the part of the major ocean carriers in 

our markets. 

B. Detention and Demurrage

1. Interpretive Rule

The second category of concern that the Fact Finding Officer heard about

from stakeholders during the Fact Finding was detention and demurrage charges

and other new charges by carriers and marine terminals. Many have charged that 

empty container return practices, and other carrier practices, have not only resulted 

in increased operating costs, but in many cases, resulted in demurrage and 

detention charges due to terminals unwillingness to accept empty containers.

Issuing the Interpretive Rule on Demurrage and Detention Under the 

Shipping Act in May 2020, was one of the biggest challenges the Commission has 

ever undertaken. Demurrage and detention charges are controversial

internationally. The United States is the first nation to take steps to confine the 

charges to the purpose for which they are intended: to incentivize shippers to pick 

up cargo and return equipment during allotted time periods. Central to the 

Commission’s Interpretive Rule on Demurrage and Detention is the principle that

detention and demurrage charges and policies should serve the primary purpose of 

incentivizing the movement of cargo and promoting freight fluidity.

The Commission employed an Interpretive Rule to provide a standard – the 

incentive principle – to govern analysis of detention and demurrage charges. This 

standard is issued under the existing statutory requirements of 46 U.S.C.

§ 41102(c) that ocean carrier and marine terminal operators “may not fail to 

establish, observe, and enforce just and reasonable regulations and practices 

relating to or connected with receiving, handling, storing, or delivering property.” 

The Interpretive Rule is based on the incentive principle – that detention and 

demurrage fees must facilitate freight fluidity. In effect, this principle allocates the 

risk of congestion to those in the best position to address the issues – ocean 

common carriers, seaports, marine terminal operators, and in some cases, shippers.
FACT FINDING 29 – FINAL REPORT 46

The Commission is enforcing the Interpretive Rule to define and address 

“unreasonable” detention and demurrage charges. Cases have been filed, giving the 

Commission the opportunity to clarify unreasonable charges. Based on information 

developed as part of our “Vessel-Operating Common Carrier Audit Program,” the 

Commission is moving forward to investigate situations that may violate 46 U.S.C.

§ 41102(c) in the case of demurrage and detention.

2. Information Demands

Due to concerns that carriers were not following the Commission’s rule on 

detention and demurrage practices, the Fact Finding Officer issued information 

demands to ocean carriers about their detention and demurrage practices. The Fact 

Finding also solicited information and evidence from shippers, truckers, 

intermediaries, and their trade associations and required carriers and marine 

terminal operators to provide information and evidence on demurrage and 

detention, empty container return, and export container availability. 

3. Enforcement of Interpretive Rule

A major misunderstanding surrounds the nature of the Demurrage and 

Detention Interpretive Rule. The Interpretive Rule is not merely guidance. We 

have issued several “guidance statements” as part of Fact Finding 29, and they are 

useful regulatory tools. But the Interpretive Rule acts as the “interpretation” of 

demurrage and detention charges as potential “unreasonable practices” under 

section 41102(c) of Title 46, United States Code.72 The Interpretive Rule is the 

basis for Commission investigations of potential violations of section 41102(c) 

against ocean carriers for unreasonable practices regarding demurrage and 

detention. This law enforcement aspect of Fact Finding 29 is aimed at potential 

unreasonable demurrage and detention charges and is currently underway, and it 

may result in civil penalty proceedings or other formal enforcement actions.

Based on the Interpretive Rule, the Commission has completely reoriented 

our resources to focus on demurrage and detention, including beginning a new 

72 Without the Interpretive Rule, it would take years of investigations and complaints for the Commission 

to develop a coherent approach to “unreasonable” demurrage and detention charges case-by-case.
FACT FINDING 29 – FINAL REPORT 47

program to reach out to ocean carriers and audit their demurrage and detention 

compliance.

4. Need for Information on Which to Base Enforcement Actions

One final point regarding a violation of any law or regulation: to enforce the 

Interpretive Rule, the Commission must be made aware of the facts surrounding a 

potential violation to pursue an investigation. Whether it is through a complaint or 

a notice to the Commission’s Bureau of Enforcement, the Commission needs facts 

to pursue demurrage and detention violations. 

IV. COMMISSION ACTION: INTERM AND SUPPLEMENTAL 

RECOMMENDATIONS

A. Interim Recommendations

On July 28, 2021, during the open session of a Federal Maritime 

Commission meeting, the Fact Finding Officer provided the Commission with 

Interim Recommendations to address current conditions contributing to 

inefficiencies and congestion in the freight delivery system exacerbated by impacts 

associated with the ongoing COVID-19 pandemic.73 The recommendations aimed 

at minimizing barriers to private party enforcement of the Shipping Act, clarifying 

Commission and industry processes, encouraging shippers, drayage operators, and 

other stakeholders to assist Commission enforcement actions, and support the 

ability of our Office of Consumer Affairs and Dispute Resolution Services to 

facilitate prompt and fair dispute resolution and assist shippers in emergency 

situations. 

In sum, eight interim recommendations were submitted to and approved by 

the Commission to address the three goals: 

• Minimizing Barriers to Private Party Action;

• Clarifying Commission and Industry Processes; and 

73 FMC Press Release: Remarks of Commissioner Rebecca Dye on Fact Finding 29 Interim 

Recommendations, (Jul. 28, 2021), https://www.fmc.gov/remarks-of-commissioner-rebecca-dye-on-Fact 

Finding-29-interim-recommendations/.
FACT FINDING 29 – FINAL REPORT 48

• Encouraging Assistance with Commission Investigation. 

The Commission voted to implement the four recommendations that do not 

require legislative action in September 2021. As of the writing of this report, all 

these recommendations have either been accomplished or are underway at the 

Commission. 

1. Minimizing Barriers to Private Party Action

Despite persistent criticism of carrier and terminal practices since the very 

beginning of Fact Finding 29, few private parties have filed complaints seeking 

reparations. This apparent disconnect fueled discussions with stakeholders and an 

internal review of Commission policies. It appears that shipper and trucker 

concerns about retaliation, litigation costs, and attorney fees are important 

disincentives to private party enforcement of 46 U.S.C. § 41102(c). The Fact 

Finding Officer recommended three actions to address these concerns:

• Amend section 41104(a)(3) of title 46, United States Code, to broaden 

the anti-retaliation provision in the Shipping Act to respond the concerns 

raised by shippers, especially exporters;

• Amend section 41305(c) of title 46 to authorize the Commission to order 

double reparations for violations of section 41102(c), with Commission 

guidance focusing this provision on demurrage and detention violations 

and other types of cases or behavior; and 

• Issue a Commission policy statement regarding three areas related to 

private party complaints: retaliation, attorney fees, and representational 

complaints, including trade associations.

The first recommendation is a request from the Fact Finding Officer to 

Congress to amend the statute to remove a potential barrier to private party action. 

This recommendation was based on perceived fears from the industry that they will 

face retaliation when filing a complaint. The Shipping Act does prohibit 

retaliation,

74 but it only applies to retaliation by carriers against “shippers,” it does 

not apply to retaliation by other regulated entities or to retaliation against nonshippers, such as drayage operators or others working on behalf of shippers. Thus,

74 46 U.S.C. § 41104(a)(3).
FACT FINDING 29 – FINAL REPORT 49

the Fact Finding Officer recommended amending the statue to reflect the different 

types of entities who could be subject to retaliation and to make clear that 46 

U.S.C. § 41104(a)(3) is not limited to protecting competition among carriers, but 

also protects the ability to complain to the Commission about potentially unlawful 

conduct free from retaliatory fears.

The second recommendation is also for a statutory change and again asks 

Congress to remove a potential barrier to private party action. One potential 

disincentive to private party complaints is the cost of litigating against carriers or 

marine terminal operators, especially when the amount in dispute may be 

comparatively small. The Fact Finding Officer recommended that Congress change 

these incentives, and deter unlawful demurrage and detention practices, by 

amending 46 U.S.C. § 41305(c) to add 46 U.S.C. § 41102(c) to the list of 

prohibitions for which double reparations are available.

The third recommendation was to create Commission guidance or “policy 

statements” on three areas related to private party complaints: (1) the current antiretaliation prohibition, (2) attorney fees, and (3) who may file a complaint. All 

three policy statements were issued on December 28, 2021 and were announced 

via press release75 and through the Federal Register.76

In the first policy statement (Docket No. 21-13), the Commission reiterated 

that shippers’ associations and trade associations may file a complaint alleging a 

prohibited act violation under 46 U.S.C. Chapter 411. This allows these 

organizations to protect the interests of their members while also providing 

shippers with a degree of separation and insulation from potential retaliation.77 The 

second statement (Docket No. 21-14) explained the Commission’s approach on 

attorney fees and reiterates that a party who brings an unsuccessful complaint is 

not automatically required to pay the other party’s attorney fees.78 The 

75 See Press Release: FMC Policy Statements Provide Guidance on Complaints Process, (Dec. 18, 2021),

https://www.fmc.gov/fmc-policy-statements-provide-guidance-on-complaints-process/. 

76 87 Fed. Reg. 13292. 

77 Docket No. 21-13: Statement on Representative Complaints, (Dec. 28, 2021), 

https://www2.fmc.gov/readingroom/docs/21-13/21-13_Representative_Complaints.pdf/.

78 Docket No. 21-14: Statement on Attorney Fees, (Dec. 28, 2021), 

https://www2.fmc.gov/ReadingRoom/docs/21-14/21-14_Policy_Atty_Fees.pdf/. 
FACT FINDING 29 – FINAL REPORT 50

Commission will look favorably upon complainants who raise non-frivolous 

claims in good faith, who litigate zealously but within the rules and for proper 

purposes, and who comply with Commission Orders. Finally, in the third statement 

on retaliation (Docket No. 21-15), the Commission emphasized that it broadly 

defined both who can bring a retaliation complaint, as well as the types of shipper 

activity that is protected under the existing retaliation prohibitions. This policy 

statement also addresses the proof necessary for certain retaliation complaints.79

2. Clarifying Commission and Industry Processes 

Throughout the Fact Finding, stakeholders repeatedly demonstrated 

confusion with the processes currently available at the Commission. There was

misunderstanding, for example, about the differences between small claims and 

formal private party complaints, and between private party complaints and 

“complaints” to the Commission alleging potential violations of the Shipping Act 

for investigation or “complaints” to the Office of Consumer Affairs and Dispute 

Resolution Services (CADRS) for requests for dispute resolution services. To 

remedy this confusion and to generate more interest in using the preexisting 

Commission processes, the Fact Finding Officer recommended:

• Revising the Commission’s website to provide clarity regarding the 

Commission’s existing processes to bring factual allegations to the 

Commission for resolution; and 

• Holding a webinar to explain Commission processes.

The first two recommendations were aimed at accomplishing the same 

objective, clarifying Commission processes. The Fact Finding Officer 

recommended that the Commission’s website should more clearly explain the 

differences between private party complaints, the Bureau of Enforcement’s

investigation and enforcement process, and dispute resolution services provided by 

CADRS. While all this information is currently on the Commission’s website, 

housing it on the same page will allow stakeholders to discern the differences more 

clearly. Similarly, holding a webinar that discusses all three options and compares 

them could help dispel confusion and may aid the public as they choose a process. 

79 Docket No. 21-15: Statement on Retaliation, (Dec. 28, 2021),

https://www2.fmc.gov/ReadingRoom/docs/21-15/21-15_Policy_Retaliation.pdf/. 
FACT FINDING 29 – FINAL REPORT 51

This webinar was released on April 25, 2022.80 To further aid the public on 

February 15, 2022, the Fact Finding Officer issued a press release explaining 

options for filing complaints at the FMC.81

In addition to clarifying Commission practices, the Fact Finding Officer also 

recommended action to clarify industry practices, specifically with respect to 

billing. Throughout the Fact Finding, industry members reported confusion about 

the information contained in invoices. Although the Commission declined to 

prescribe specific billing practices in the Interpretive Rule on Demurrage and 

Detention,82 it nonetheless referred to the content and clarity of practices and 

regulations regarding demurrage and detention billing in the final rule, 46 C.F.R. 

§ 545.5(d). To evaluate whether further action should be taken to clarify billing 

practices, the Fact Finding Officer recommended: 

• Issuing a rulemaking concerning information on demurrage and detention 

billings.

Since the close of Fact Finding 28 and the issuance of the Interpretive Rule, 

the Surface Transportation Board adopted a rule requiring certain rail carriers to 

include “certain minimum information on or with demurrage invoices and provide 

machine-readable access to the minimum information.”83 The Fact Finding Officer 

recommended that the Commission issue an Advanced Notice of Proposed 

Rulemaking (ANPRM) to assess whether a similar rule is appropriate in the ocean 

shipping context. 

The Commission recently moved forward on this Interim Recommendation.

On February 4, 2022, the Commission voted unanimously to issue an ANPRM 

seeking information from the public on whether a new rule governing demurrage 

and detention billing practices would benefit the trade.

80 FMC Press Release: FMC Launches Instructional Video on How to File Complaints, (Apr.25, 2022), 

https://www.fmc.gov/fmc-launches-instructional-video-on-how-to-file-complaints/.

81 FMC Press Release: Commissioner Dye Explains Options for Filing Complaints at FMC, (Feb. 15, 

2022), https://www.fmc.gov/commissioner-dye-explains-options-for-filing-complaints-at-fmc/.

82 85 Fed. Reg. at 29661.

83 Final Rule: Demurrage Billing Requirements, 86 Fed. Reg. 17735 (Apr. 6, 2021).
FACT FINDING 29 – FINAL REPORT 52

The ANPRM requested comments on five areas related to demurrage and 

detention billing and whether they should be subject to future regulation. These 

include what data should be included on bills, reasonable timeframes for billing 

and response, and whether other charges should be included in billing regulation.

The ANPRM noted the Commission is considering the merits of establishing 

regulations mandating certain minimum information be included in bills issued for 

demurrage and detention. Through the ANPRM, the Commission is also 

considering prescribing a maximum period in which an invoice can be sent. The 

ANPRM also inquired whether this rule should apply to marine terminal operators 

and non-vessel-operating common carriers in addition to vessel-operating common 

carriers. The ANRPM was published in the Federal Register on February 25, 2022,

with comments due on March 17, 2022.84 This comment period was later extended 

to April 16, 202285 and the Commission received eighty-one comments. 

3. Encouraging Assistance with Commission Investigation 

Though the Commission brings enforcement actions under 46 U.S.C. 

§ 41302(a), the Commission needs stakeholders to participate in all stages of the 

enforcement process. Not only does the Commission use information provided by 

stakeholders to inform the Commission of violations, but as noted above, the 

Commission also needs stakeholders who are willing to support enforcement 

actions. To encourage members of the shipping community to aid the Commission 

in its enforcement actions, the Fact Finding Officer recommended: 

• Amending 46 U.S.C. §§ 41109 and 41309 to authorize the Commission 

to order refund relief in addition to civil penalties in enforcement 

proceedings.

Under the current statutory framework, in an enforcement proceeding, the 

Commission can assess a civil penalty for a violation of a prohibited act,86 but that 

penalty goes to the United States Government, not injured parties.87 The Fact 

Finding Officer believes that granting the Commission the discretionary authority 

84 ANPRM: Demurrage and Detention Billing Requirements, 87 Fed. Reg 8506, (Feb 25, 2022).

85 Extension of Comment Period, 87 Fed. Reg. 15179, (Mar. 11, 2022).

86 46 U.S.C. §§ 41107(a), 41109.

87 Id. at § 41107(a).
FACT FINDING 29 – FINAL REPORT 53

to order refunds in enforcement proceedings in addition to civil penalties, or in lieu 

of civil penalties, would incentivize parties to work with Commission investigatory 

staff.

4. Bolstering CADRS

Throughout the Fact Finding, stakeholders repeatedly mentioned the benefits

of the Office of Consumer Affairs and Dispute Resolution Services (CADRS) and 

the vital role it plays in assisting stakeholders resolve disputes without litigation. In 

doing so, CADRS serves as a liaison between different groups and educates them 

about their responsibilities. Export-related issues are similar but not identical to 

import-related issues. Due to the rise in export-related issues, the Fact Finding

Officer recommended: 

• Designating an Export Expert in CADRS.

On December 18, 2021, a Commission staff member was detailed to this 

position to begin assisting stakeholders encountering export issues. The 

experienced staff member has been permanently reassigned to assist CADRS as the 

export advocate to promptly address export matters. In addition, the Commission is 

actively recruiting and hiring positions to provide further resources for CADRS.

Through later work with carriers, the Fact Finding Officer also worked to 

revitalize the “Rapid Response” program housed in CADRS. The Commission 

established Rapid Response Teams in 2010 to provide prompt solutions for 

commercial disputes between shippers and carriers. The Fact Finding Officer was 

able to secure a recommitment from carriers to commit Chief Operating Officers to 

this program for resolving the most urgent emergencies.

B. Final Recommendations

The last two years have demonstrated that the Commission is uniquely 

positioned to handle the challenges facing our global supply chain. While the 

primary focus of this investigation has been seeking commercial solutions, there 

have been moments where direct Commission action was warranted. In the 

Supplemental Order issued in November 2020, the Commission endorsed the Fact 

Finding Officer to investigate: (1) practices and regulations related to demurrage 
FACT FINDING 29 – FINAL REPORT 54

and detention, (2) empty container return in light of 46 C.F.R. § 545.5, and (3)

practices related to the carriage of U.S. exports.

Much time has been spent in this report documenting efforts and actions 

taken by the Fact Finding Officer to investigate and provide relief to demurrage 

and detention issues, including initiating a rulemaking earlier this year to bring 

clarity to demurrage and detention billing practices. With respect to the issues of 

empty container return and U.S. exports, the Fact Finding Officer also believes the 

industry could benefit through additional recommendations, collaboration, and new 

rulemakings to similarly bring coherence and clarity to these sectors of the 

industry. The Fact Finding Officer, therefore, recommends the following additional 

recommendations: 

• A new Commission “International Ocean Shipping Supply Chain 

Program” with dedicated personnel;

• A rulemaking to provide coherence and clarity on empty container 

return practices;

• A rulemaking to provide coherence and clarity on earliest return date 

practices;

• Continued Commission support for the new FMC “Vessel-Operating 

Common Carrier Audit Program” including developing a new 

requirement for ocean common carriers, seaports, and marine 

terminals to employ an FMC Compliance Officer;

• An FMC outreach initiative to provide more information to the 

shipping public about FMC competition enforcement, service

contracts, forecasting, and shippers associations, among other topics;

• An enhanced cooperation with the federal agency most experienced in 

agricultural export promotion, the Department of Agriculture, 

concerning container availability and other issues;

• A Commission Investigation into practices relating to charges 

assessed by ocean common carriers and seaports and marine terminals 

through tariffs;

• A rulemaking to provide coherence and clarity on merchant haulage 

and carrier haulage;

• A new “National Seaport, Marine Terminal, and Ocean Carrier 

Advisory Committee” to work cooperatively with the Commission’s 

National Shipper Advisory Committee;
FACT FINDING 29 – FINAL REPORT 55

• A revival of the Rapid Response Team program as agreed by all ocean 

carrier alliance CEOs; 

• A FMC Supply Chain Innovation Teams engagement to discuss blank 

sailing coordination and information availability; and

• A reinvigorated focus on the extreme supply chain equipment 

dislocations in Memphis railheads, other rail facilities and other 

facilities around the country.

These recommendations are discussed more fully below.

1. New FMC Supply Chain Program

Over the last five years, the Commission has supported three investigations 

to explore and remedy challenges in our international ocean supply chain. In the 

Supply Chain Innovation Initiative, the focus was on enhancing supply chain 

reliability and resilience. In Fact Finding 28, the focus was on the effects of 

demurrage and detention charges. In Fact Finding 29, the emphasis has been on 

ocean supply chain issues exacerbated by the COVID-19 pandemic. 

Throughout each of these investigations, the Fact Finding Officer has dealt with 

international ocean supply chain disruptions. The reasons that these problems 

persist despite great strides made by the industry and the Commission, resides in 

the nature of the supply chain. The United States international ocean supply chain 

is a complex system, and the operational interdependence of the actors within it 

make it difficult to develop solutions to individual supply chain challenges. 

Fortunately, the Commission stands in a unique place to understand and 

address the issues facing the U.S. international ocean freight delivery system.

Therefore, the Fact Finding Officer strongly supports a dedicated program office 

for studying and addressing the growing needs in our Nation’s supply chain. This 

dedicated program office should study the issues facing our supply chain and 

propose solutions to challenges. 

2. Rulemaking on Empty Container Return

In the November 2020 Supplemental Order, the Commission endorsed the 

Fact Finding Officer’s efforts to investigate, among other things, empty container 
FACT FINDING 29 – FINAL REPORT 56

return in light of 46 C.F.R. § 545.5 in our major gateways. Over the last two years, 

teams have explored three approaches to dealing with these issues and dozens of 

meetings were conducted exploring potential solutions. The Fact Finding Officer 

also obtained information on the practices of carriers and terminals on these issues 

through the use of information demands. The data collected emphasized the need 

for the Commission to regulate the communication of vital information to shippers. 

Again, issues with empty container return are not new. In its Final Rule on 

demurrage and detention the Commission stated that, “Absent extenuating 

circumstances, practices and regulations that provide for imposition of detention 

when it does not serve its incentivizing purposes, such as when empty containers 

cannot be returned, are likely to be found unreasonable.”88 However, trucker 

complaints about difficulties in timely returning empty containers persisted after 

the Commission published its interpretive rule and increased in light of supply 

chain disruptions associated with the COVID-19 pandemic. The information 

demands served in the Fact Finding sought information from carriers and terminals 

on notification processes for empty container return and impediments to empty 

container return. Specifically, how much notice is given regarding return policies 

and what happens when inadequate notice is given. These two areas were 

identified as problematic issues in both the team meetings in 2020 and through 

follow up conversations with stakeholders. 

As noted in the earlier discussion, the information demands shed some light 

on the frustration shippers and drayage operators noted regarding notice of where 

and when empty containers can be returned. It appears that there is a lack of 

consistency across the United States with respect to the return of empties and it is 

not always clear who is responsible for communicating return locations. While 

carriers are taking strides to communicate the information to shippers and drayage 

operators, there remains a disconnect over who is ultimately responsible for 

sharing the correct information and how timely the information is shared.

The Fact Finding Officer therefore recommends that the Commission begin 

a rulemaking to bring coherence and consistency to practices surrounding the 

return of empty containers. Relying on the approaches examined in the 

88 46 C.F.R. § 545.5(c)(2)(ii). 
FACT FINDING 29 – FINAL REPORT 57

investigation, the rulemaking should focus on ensuring information is 

communicated timely and that shippers can rely on the information provided to 

them. 

3. Rulemaking on Earliest Return Dates

The Fact Finding Officer is pleased that American agricultural exporters 

enjoyed record breaking trade levels in 2021.

89 However, American exporters have 

still endured hardships over the last two years. One enduring issue for stakeholders 

throughout the Fact Finding was with earliest return dates (ERDs) for containers. 

As discussed earlier, the information demands asked how carriers provided notice 

to beneficial cargo owners/drayage operators of blanked sailings, bypassed ports, 

or changes to ERDs, and how carriers mitigated the effects of those events to 

drayage operators and shippers. MTOs were similarly asked whether they post 

information about ERDs and vessel schedules on their website. Though all carriers 

stated that they communicated vessel-schedule and/or ERD information to their 

customers, as with empty container return, responses indicated a large array of 

methods being employed to communicate information. 

Confusion over where to locate reliable information on ERDs and who is 

ultimately responsible for determining ERDs has frustrated the shipping public. 

Stakeholders have continued to express frustration regarding poor notice of where 

and when empty containers can be returned. Others mentioned instances of 

terminals refusing to receive empty containers, requiring dual transactions, or not 

having appointments for the return of empty containers. Many further charged that 

empty container return practices, ERD issues, and other carrier practices, have not 

only resulted in increased operating costs, but in demurrage and detention charges.

Again, in sum, the information demands and conversations with stakeholders

suggest there is a variety of methodologies being employed to communicate ERD 

information to shippers. The Fact Finding Officer recommends launching an 

additional rulemaking to bring coherence and consistency to practices surrounding 

the issuance of ERDs. As with the rulemaking on empty container return, this 

89 USDA Press Release: American Agricultural Exports Shattered Records in 2021, (Feb. 8, 2022), 

https://www.usda.gov/media/press-releases/2022/02/08/american-agricultural-exports-shattered-records2021 (“the American agricultural industry posted its highest annual export levels ever recorded in 2021”).
FACT FINDING 29 – FINAL REPORT 58

rulemaking should rely on the approaches discussed and generated during the Fact 

Finding and should primarily focus on removing confusion about responsibility 

and notification procedures. 

4. Ocean Carrier and Marine Terminal Compliance Officers

The Supplemental Order directed the Fact Finding Officer to investigate 

whether carriers’ policies, practices and procedures align with the principle, central 

to the Commission’s Interpretive Rule, that detention and demurrage charges and 

policies should serve the primary purpose of incentivizing the movement of cargo 

and promoting freight fluidity.

The Commission currently focuses resources on industry-wide compliance 

with the demurrage and detention Interpretive Rule and underlying statutory 

authorization. This includes actions taken by the new Commission audit teams, and 

the Commission’s compliance program to ensure conformity with the 

Commission’s regulations.

To aid in compliance operations, the Fact Finding Officer further 

recommends a new regulatory requirement that all ocean carriers and MTOs 

designate a Commission compliance officer who reports directly to the Chief 

Executive Officer (USA). Having designated officials responsible for FMC 

compliance will aid in ensuring industry-wide observance of the law and 

Commission regulations. 

5. Outreach Initiatives to Stakeholders

One of the first findings of Fact Finding 29 was a lack of awareness in the 

industry of how the Commission can serve stakeholders. Over the last two years, 

the Fact Finding Officer has shared information and advice to the shipping public. 

In the Interim Recommendations, the Fact Finding Officer provided information to 

the public on filing complaints through the issuance of three policy statements and 

the publication of an instructional video. The Fact Finding Officer recommends the 

Commission continue to focus and support outreach initiatives to continue 

engaging the shipping public on ways the Commission can assist them. 
FACT FINDING 29 – FINAL REPORT 59

6. Enhanced Interagency Cooperation for Agricultural Exporters

The Fact Finding Officer encourages increased Commission engagement 

with the U.S. Department of Agriculture, whose experience and expertise in 

handling the needs of exporters could be of great value to the Commission. One of 

the most important issues to be addressed for agricultural exporters involves access 

to ocean shipping containers. Container availability is a chronic challenge for 

agricultural exporters and the Commission should engage with the U.S. 

Department of Agriculture to assist U.S. exporters in this and other vital matters.

7. Commission Investigation into Tariff Surcharges and Other 

Charges

There are currently only limited Commission regulations to evaluate charges 

by ocean common carriers, MTOs, and seaports, contained in tariffs. Specifically, 

with any tariff change or rate increase, ocean common carriers are required to 

provide a 30-day notice to shippers and ensure that published tariffs are clear and 

definite. Recently, stakeholders have raised concerns about new charges appearing 

in their invoices. The Fact Finding Officer recommends the Commission launch an 

investigation into practices by carriers, MTOs, and seaports relating to charges 

assessed through tariffs. 

8. Rulemaking to Define Merchant Haulage and Carrier Haulage

Throughout the course of the Fact Finding, a number of stakeholders have 

expressed a lack of clarity among the parties regarding the differences between 

merchant haulage and carrier haulage. Having a clear definition of these terms will

provide coherence and definition for the responsibilities of parties. The Fact 

Finding Officer recommends a rulemaking that defines these terms for the shipping 

public. 

9. New National Seaport, Marine Terminal, and Ocean Carrier 

Advisory Committee

One of the recommendations of the Fact Finding 28 investigation was the 

development of a Commission shipper advisory committee. The charter for the 

National Shipper Advisory Committee (NSAC) was issued on June 7, 2021, and
FACT FINDING 29 – FINAL REPORT 60

the committee has been meeting regularly since then. The Committee provides 

information, insight, and expertise pertaining to conditions in the ocean freight 

delivery system to the Commission. The Fact Finding Officer believes the 

Commission and the National Shipper Advisory Committee would equally benefit 

with the creation of an ocean carrier, seaport, and marine terminal advisory 

committee. This was identified early in the Fact Finding 29 investigation90 and 

could serve the Commission as it continues to deal with issues pertaining to the 

industry.

10. Rapid Response Team in Office of Consumer Affairs and Dispute 

Resolution Services

The Commission has successfully used Rapid Response Teams (RRTs) in 

CADRS to provide a prompt solution for emergency commercial disputes between 

exporters and ocean carriers. In the past, the success of this program depended on 

carrier CEO level participation in this process. The involvement of high-level 

company leadership ensured that concerns were addressed and resolved quickly. 

Unfortunately, over the years, carrier CEO level participation with the Commission 

RRTs has diminished. 

The Commission should reestablish a RRT process that involves ocean

carrier CEOs. Through meetings with the CEOs of the U.S.-based subsidiaries of 

all major ocean carriers, the Fact Finding Officer has obtained their commitment to 

the program. This program will ensure that the most serious and time-sensitive 

issues are addressed and resolved promptly. 

11. FMC Supply Chain Innovation Teams on Blank Sailings

Early in the pandemic, shippers struggled with remaining informed on 

blanked sailings and bypassed ports. Recently, stakeholders have raised concerns 

about information availability and coordination with respect to blanked sailings. 

The Fact Finding Officer recommends engaging Innovation Teams to identify 

commercial solutions to lingering issues with blanked sailings and other issues.

90 See FMC Press Release: Commissioner Dye Announces Findings of San Pedro Bay Discussions, (Jun. 

17, 2020), https://www.fmc.gov/commissioner-dye-announces-findings-of-san-pedro-bay-discussions/.
FACT FINDING 29 – FINAL REPORT 61

12. Memphis Supply Innovation Team

The Fact Finding Officer strongly recommends a reinvigorated focus with 

the Surface Transportation Board on the critical equipment dislocations in 

Memphis and in other rail facilities around the country. Unfortunately, the situation 

in Memphis and in railheads around the country has deteriorated. The Fact Finding 

Officer strongly encourages a renewed effort to resolve the challenges faced by 

stakeholders in Memphis.

V. PATH FORWARD – MUTUALLY ENFORCEABLE 

CONTRACTS

For the last two years, the international ocean supply chain has weathered 

effects of the COVID-19 pandemic, exacerbated by an unprecedented surge in 

consumer demand created in part by COVID-19 lockdowns and facilitated by ecommerce. Whether high consumer demand and the resulting congestion is the 

“new normal,” time will tell. The Fact Finding Officer believes that the actions 

taken pursuant to the Interim Recommendations, and the approval and 

implementation of the Final Recommendations, will address a number of the 

challenges experienced in the international ocean supply chain as a result of 

COVID-19.

The Fact Finding Officer also believes that to address bottlenecks in the 

supply chain and make the ocean supply chain more efficient, it is crucial that 

shippers and ocean carriers move beyond vague and unenforceable rate 

agreements. One important thing for shippers and carriers alike would be for 

service contracts to entail a “meeting of the minds” with mutual obligations and 

commitments that are part of enforceable commercial documents. This is what was 

anticipated in the Ocean Shipping Reform Act of 1998. Mutual commercial 

commitments and understanding will provide protection for exporters and 

importers from volatile shipping rates and the forecasting that ocean carriers need 

to provide capacity to serve the needs of their customers.
FACT FINDING 29 – FINAL REPORT 62

ACKNOWLEDGEMENTS 

This has been the fourth Fact Finding Investigation for which I have served 

as Fact Finding Officer during my tenure at the Commission. Of the three, I have 

found this one, launched to respond to a global pandemic, to be the most 

challenging – and the most rewarding. First, I wish to thank my fellow 

Commissioners for placing their confidence and trust in me to examine these issues 

and make recommendations to eliminate bottlenecks in the U.S. international 

ocean supply chain caused or exacerbated by the COVID-19 pandemic. I wish to 

thank former Chairman Michael A. Khouri, and current Chairman Daniel B. 

Maffei, for their unfailing support for this effort.

Second, I wish to thank all the stakeholders that met and communicated with 

me over the last two years and actively participated in the Innovation Teams that 

contributed to the work of this Fact Finding. The recommendations flowing from 

this Fact Finding would not have been nearly as well thought out and beneficial 

without the participation of those who contributed to this effort. I also wish to 

acknowledge several on whose work I relied: Bjorn Jensen of Sea Intelligence, 

Drewry Maritime Research, and the Federal Reserve Banks of St. Louis and 

Cleveland.

Finally, I wish to thank those here at the Federal Maritime Commission who 

helped me with this work. I could not have done it without the experienced staff at 

the Federal Maritime Commission. 

Thank you all!

Rebecca F. Dye
FACT FINDING 29 – FINAL REPORT 63

APPENDIX

Team Participants

Original Team Members

April 2020

Amazon Global Logistics

Maersk

American Coffee Corporation

Mohawk Global Logistics

APM Terminals

MOL America

ASF Global

MSC

Atlantic Container Line

North American Chassis Pool 

Cooperative

BassTech International

Northwest Seaport Alliance

Best Transportation

Oliver Wyman

Cal Cartage Transportation

OOCL

Cargill Inc.

Port Authority of New York and New 

Jersey

CMA CGM America

Port of Long Beach

ContainerPort Group

Port of New Orleans

Fenix Marine Services

Port of Olympia

Flexport

Ports America

Gap, Inc.

Scoular

Gemini Shippers Association

Seaboard Marine

Georgia Ports

SeaCube Container Leasing

Global Container Terminals

South Carolina Ports Authority

Hapag-Lloyd

T.G.S. Transportation

IMC Companies

Target

International Longshore and 

Warehouse Union

Total Terminals International

ITS Terminals

Walmart

Louis Dreyfus Company

Yusen Terminals

Amazon Global Logistics

ZIM
FACT FINDING 29 – FINAL REPORT 64

Carrier Team Participants

May 2020

CMA CGM

Maersk

COSCO

MSC

Evergreen Line

Ocean Network Express

Hapag Lloyd

OOCL

HMM

Yang Ming

Southern California Team

June 2020

Fenix Marine Terminals

Total Terminals International

Ports America

Yusen Terminals

North Atlantic Teams

July 2020

American Coffee Corporation

Gemini Shippers

Association of Bi-State Motor 

Carriers

IMC Companies

Atlantic Container Line

NJ Motor Truck Association

Best Transit 

Port of New York and New Jersey

Consolidated Chassis Management

Seaboard Marine

Container Port Group

Gulf Coast Teams

September and October 2020

American Coffee Corporation

Pacorini Group

Ceres Global Ag

Ports America

DOW Corporation 

ResinTech

IPaper.com

Rooms To Go

J.W. Allen

The Dupuy Group

New Orleans Terminal

Triple G Express
FACT FINDING 29 – FINAL REPORT 65

Memphis Team

August 2021

Ashley Furniture Industries

Louis Dreyfus Company Cotton

AutoZone, Inc.

IMC Companies

BNSF Railway

International Paper

CMA CGM

Maersk

CN Railroad

Mallory Alexander International 

Logistics

COFCO International

Mohawk Global Logistics

Cornerstone Systems

Nike

Delta Strategy Group

Olam International

Dunavant Logistics Group 

Port of Memphis

ECOM USA 

Protective Industrial Products

FedEx Logistics

Pyramex Safety Products

Greater Memphis Chamber

TCW

IMC Companies

The Mitchell Group

International Paper

Wayfair

Additional Terminal and Carrier Meetings

November 2021 - February 2022

APL

Long Beach Container Terminal

APM Terminals

Maersk

CMA-CGM

Maher Terminals

COSCO

MSC

Evergreen Line

ONE

Everport Terminals

OOCL

Fenix Marine Services

SSA Marine Terminals

Global Container Terminals

Total Terminals International

Hapag Lloyd

Yang Ming

HMM

Yusen Terminals

ITS Terminals