Federal Maritime

Commission

59th Annual

Report

for

Fiscal Year

2020

Table of Contents

Letter of Transmittal 1

Members of the Commission 3

Glossary 5

FMC Mission, Strategic Goals, and Functions 9

Strategic Goal 1 9

Strategic Goal 2 10

Statutory Authority 10

Year in Review 11

Efficiency and Competition 15

Strategic Goal 1 15

Agreement Filings and Review 16

Competitive Impact and Monitoring 18

Carrier Alliance Agreements 19

Tariffs, Service Contracts, NSAs, & MTO Schedules 23

International Cooperation 25

Protecting the Public 27

Strategic Goal 2 27

Fact Findings 28, 29, & 30 27

Licensing 32

Passenger Vessel Program 34

Consumer Affairs and Dispute Resolution 35

Enforcement, Audits and Penalties 36

Inter-Agency Cooperation 37

Competitive Impact of Ocean Carrier Alliance Joint Purchases of Certain 

Covered Services 41

Review of Agreements Under LoBiondo Act 41

DOJ/FTC Guidelines for Collaborations Among Competitors 42

Developments in Major U.S. Foreign Trades 47
Worldwide 47

Asia 47

North Europe 48

Indian Subcontinent and Middle East 49

Central America and the Caribbean 50

South America 51

Mediterranean 51

Africa 52

Australia and Oceania 53

Top Twenty U.S. Liner Cargo Trading Partners 54

Top Twenty U.S. Liner Cargo Trading Partners (CY2019) 55

Foreign Shipping Practices Act 56

Controlled Carriers 57

Formal Investigations, Private Complaints and Litigation 59

Formal Proceedings 59

Rulemakings 64

Leveraging Technology 67

APPENDICES 71

A – FMC Organization Chart 71

B – FMC Senior Officials – FY 2020 72

C – Statement of Appropriations, Obligations, and Receipts 73

D – Agreement Types 74

E – Agreement Review Standard 77

F – Standard for Practices in Handling Property 79
59th Annual Report 1

Letter of Transmittal

FEDERAL MARITIME COMMISSION

800 North Capitol Street, N.W.

Washington, DC 20573-0001

March 31, 2021

To the United States Senate and House of Representatives:

On behalf of my fellow Commissioners, and pursuant to section 103(e) of Reorganization 

Plan No. 7 of 1961, and section 208 of the Merchant Marine Act, 1936, as amended, at 46 U.S.C. 

306(a), I welcome the opportunity to share with you the 59th Annual Report of the Federal 

Maritime Commission, Fiscal Year 2020.

This report highlights the key accomplishments, initiatives, and relevant events that occurred 

between October 1, 2019, and September 30, 2020. Included in the following pages are reports 

about:

•  Consequences to the shipping industry of the global spread of COVID-19 and related 

Commission initiatives;

•  Commission operations during the pandemic;

•  Significant agreements filed at the Commission;

•  Status of formal investigations, private complaints, and litigation before the Commission;

•  Trends in licensing of non-vessel-operating common carriers and freight forwarders; and 

•  Developments in the key trade lanes serving the United States. 

It is the mission of the Federal Maritime Commission to ensure a competitive and reliable 

international ocean transportation system. The Commissioners and Staff of the FMC are proud 

of the work we do toward that goal.

Sincerely,

Michael A. Khouri

Chairman
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59th Annual Report 3

Members of the Commission

Fiscal Year 2020

Michael A. Khouri

Chairman

Appointed 2009

Term Expires 2021

Carl W. Bentzel 

Commissioner

Appointed 2019

Term Expires 2024

Rebecca F. Dye

Commissioner

Appointed 2002

Term Expired 2020

Louis Sola

Commissioner

Appointed 2019

Term Expires 2023

Daniel B. Maffei

Commissioner

Appointed 2016

Term Expires 2022
4 59th Annual Report

Chairman Khouri and his fellow Commissioners welcome Carl W. Bentzel to the FMC 

as its newest member, December 9, 2019.
59th Annual Report 5

Glossary

Agreement means an understanding, 

arrangement, or association, written or oral 

(including any modification, cancellation or 

appendix) entered into by or among ocean 

common carriers and/or marine terminal operators, but does not include a maritime labor 

agreement. Various types of agreements are 

described in Appendix D to this report.

Bulk cargo means cargo that is loaded and 

carried in bulk without mark or count in a 

loose unpackaged form, having homogeneous 

characteristics. 

Common carrier means a person holding 

itself out to the general public to provide 

transportation by water of cargo between 

the United States and a foreign country for 

compensation that:

1. Assumes responsibility for the transportation from port or point of receipt to the 

port or point of destination; and

2. Utilizes, for all or part of that transportation, a vessel operating 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 

or by a vessel when primarily engaged 

in the carriage of perishable agricultural 

commodities:

i. If the common carrier and the 

owner of those commodities are 

wholly-owned, directly or indirectly, by a person primarily 

engaged in the marketing and 

distribution of those commodities and

ii. Only with respect to the carriage 

of those commodities.

Consignee means the recipient of cargo 

from a shipper; the person to whom a transported commodity is to be delivered. 

Container means a demountable and 

reusable freight-carrying unit designed to 

be transported by different modes of transportation and having construction, fittings, 

and fastenings able to withstand, without 

permanent distortion or additional exterior 

packaging or containment, the normal stresses 

that apply on continuous all-water and intermodal transportation. The term includes dry 

cargo, ventilated, insulated, refrigerated, flat 

rack, vehicle rack, liquid tank, and opentop containers without chassis, but does not 

include crates, boxes or pallets.

Controlled carrier means a vessel-operating 

common carrier that is, or whose operating 

assets are, directly or indirectly owned or 

controlled by a government; ownership or 

control by a government shall be deemed to 

exist with respect to such common carrier if:

1. A majority portion of the interest in the 

common carrier is owned or controlled 

in any manner by that government, by 

an agency thereof, or by any public or 

private person controlled in any manner 

by that government, by any agency 

thereof, or by any public or private 
6 59th Annual Report

person controlled by that government; 

or

2. That government has the right to 

appoint or disapprove the appointment 

of a majority of the directors, the chief 

operating officer or the chief executive 

officer of the common carrier.

IMO 2020 means an International Maritime Organization rule in effect as of January 

1, 2020 that limits Sulphur content in fuel use 

on board ships. 

Intermodal transportation means continuous through transportation involving more 

than one mode of service (e.g., ship, rail, 

motor, air), for pickup and/or delivery at a 

point beyond the area of the port at which the 

vessel calls. The term “intermodal transportation” can apply to “through transportation (at 

through rates)” or transportation on through 

routes using combination rates.

Demurrage is the charge per container for 

the use of ground space at the marine terminal.

Detention is the charge by the ocean carrier 

for use of the container equipment. Per Diem 

relates to assessorial charges beyond demurrage and detention.

Marine Terminal Operator (MTO) means a 

person engaged in the United States of a commonwealth, territory, or possession thereof, 

in the business of furnishing wharfage, dock, 

warehouse or other terminal facilities in 

connection with a common carrier, or in connection with a common carrier and a water 

carrier subject to Subchapter II of Chapter 

135 of Title 49, United States Code. A marine 

terminal operator includes, but is not limited 

to, terminals owned or operated by states and 

their political subdivisions; railroads who perform port terminal services not covered by 

their line haul rates; common carriers who 

perform port terminal services; and warehousemen who operate port terminal facilities.

Ocean Carrier Alliance Agreement means 

two or more shipping lines authorized to discuss and agree on the supply of vessel capacity 

across multiple trades. Alliance agreements 

may contain other authorities such as, information exchange, joint procurement of goods 

or services necessary to operate their services, 

etc. While there are currently seven global alliance agreements on file with the Commission, 

only three are jointly/collectively operating 

container services in the U.S. trades. 

Vessel-operating common carrier (VOCC) /

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.

Ocean transportation intermediary 

(OTI) means an ocean freight forwarder or 

a non-vessel-operating common carrier. For 

purposes of this part,

Ocean freight forwarder means a person 

that—

1. In the United States, dispatches shipments from the United States via a 

common carrier and books or otherwise 
59th Annual Report 7

arranges space for those shipments on 

behalf of shippers; and

2. Processes the documentation or performs related activities incident to those 

shipments; and

Non-vessel-operating common carrier 

(NVOCC) means a common carrier that does 

not operate the vessels by which the ocean 

transportation is provided and is a shipper in 

its relationship with an ocean common carrier.

Port means a place at which a common carrier originates or terminates (by transshipment 

or otherwise) its actual ocean carriage of cargo 

or passengers as to any particular transportation movement.

Service Contract means a written contract, 

other than a bill of lading or receipt, between 

one or more shippers and an individual ocean 

common carrier or an agreement between or 

among ocean common carriers in which the 

shipper makes a commitment to provide a certain minimum quantity or portion of its cargo 

or freight revenue over a fixed time period, 

and the individual ocean common carrier or 

the agreement commits to a certain rate or rate 

schedule and a defined service level, such as, 

assured space, transit time, port rotation, or 

similar service features. 

Shipper means: a cargo owner; the person 

for whose account the ocean transportation is 

provided; the person to whom delivery is to be 

made; a shipper's association; or an NVOCC 

that accepts responsibility for payment of all 

charges applicable under the tariff or service 

contract.

Tariff means a publication containing the 

actual rates, charges, classifications, rules, 

regulations and practices of a common carrier or a conference of common carriers. The 

term “practices” refers to those usages, customs or modes of operation which in any way 

affect, determine or change the transportation rates, charges or services provided by a 

common carrier or conference and, in the case 

of conferences, must be restricted to activities 

authorized by the basic conference agreement.

Transshipment means the physical transfer of cargo from a vessel of one carrier to a 

vessel of another in the course of all-water 

or through transportation, where at least 

one of the exchanging carriers is an ocean 

common carrier subject to the Commission's 

jurisdiction. 
8 59th Annual Report
59th Annual Report 9

FMC Mission, Strategic 

Goals, and Functions

The Federal Maritime Commission (FMC or Commission) is an independent agency responsible for the regulation of oceanborne transportation in the foreign commerce of the United 

States for the benefit of U.S. exporters, importers, and the U.S. consumer. 

The FMC's Mission is:

• Ensure a competitive and reliable international ocean transportation supply system that 

supports the U.S. economy and protects the public from unfair and deceptive practices.

The Commission achieves its mission by ensuring that the fundamental dynamics of a 

free, open, and competitive ocean transportation market 

drive economic outcomes. To that end, the Commission 

is committed to faithfully administer the Shipping Act, 

employing a minimum of government intervention and 

regulatory costs and by placing a greater reliance on the 

marketplace.

Strategic Goal 1

Maintain an efficient and competitive international ocean transportation system.

The FMC ensures competitive and efficient ocean transportation services for the shipping 

public by:

• Reviewing and monitoring agreements among ocean common carriers and marine 

terminal operators (MTOs) serving the U.S. foreign oceanborne trades to ensure that 

any joint or collective activities do not cause substantial increases in transportation 

costs or decreases in transportation services;

• Maintaining and reviewing confidentially filed service contracts and Non-Vessel-Operating Common Carrier (NVOCC) Service Arrangements to guard against detrimental 

effects to shipping;

• Providing a forum for exporters, importers, and other members of the shipping public 

to obtain relief from ocean shipping practices or disputes that impede the flow of 

commerce;

• Ensuring common carriers’ tariff rates and charges are published in private, automated 

tariff systems and electronically available;

• Monitoring rates, charges, and rules of government-owned or controlled carriers to 

ensure they are just and reasonable; and

Competition and Integrity for 

America’s Ocean Supply Chain
10 59th Annual Report

• Taking action to address unfavorable conditions caused by foreign government or 

business practices in U.S. foreign shipping trades.

Strategic Goal 2

Protect the shipping public from unlawful, unfair and deceptive ocean 

transportation practices and resolve shipping disputes.

The FMC protects the public from financial harm and contributes to the integrity and security of the U.S. supply chain and transportation system by:

• Investigating and ruling on complaints regarding rates, charges, classifications, and 

practices of common carriers, MTOs, and Ocean Transportation Intermediaries (OTIs) 

that violate the Shipping Act;

• Licensing OTIs with appropriate character and adequate financial responsibility; 

• Helping resolve disputes involving shipments of cargo, personal or household goods, 

or disputes between cruise vessel operators and passengers;

• Identifying and holding regulated entities accountable for mislabeling cargo shipped 

to or from the United States; and

• Ensuring that cruise lines maintain financial responsibility to pay claims for personal 

injury or death, and to reimburse passengers when their cruise fails to sail.

Statutory Authority

The principal statutes administered by the Commission, now codified in Title 46 of the 

U.S. Code at sections 40101 through 44106, are:

• The Shipping Act of 1984 (Shipping Act), 46 U.S.C. chapters 401-413:

• The Foreign Shipping Practices Act of 1988 (FSPA), 46 U.S.C. chapter 423;

• Section 19 of the Merchant Marine Act, 1920 (1920 Act), 46 U.S.C. chapter 421;

• Sections 2 and 3 of Pub. L. No. 89-777, 80 Stat. 1350, 46 U.S.C. chapter 441; and 

• Section 834 of the Frank LoBiondo Coast Guard Authorization Act of 2018 (LoBiondo 

Act), 46 U.S.C. § 3503(b)(1)(C). 
59th Annual Report 11

Year in Review

Changes to the container shipping industry were anticipated for 2020, however, the 

predicted cause was the implementation of a 

new global low sulfur fuel mandate referred 

to as IMO 2020. Instead, the global spread of 

COVID-19 had systemic consequences to shipping and supply chains. The consequence has 

been a year in industry and trade that has been 

unlike any other.

At the time of this report’s preparation, 

COVID-19’s impact to shipping and the oceanlinked supply chain can be broken into two 

distinct phases. The first phase began in the 

early spring 2020 and lasted until approximately July. During that period, when 

factories were closing in China, cargo volumes 

collapsed. Ocean carriers cancelled sailings to 

match vessel capacity to far lower than usual 

cargo demand. Cargo began stacking up on 

docks, as distribution centers reached capacity and there was simply nowhere for freight 

to go. Terminals in the United States became 

congested with both imports and empty containers. Cargo began stacking up on docks, 

as distribution centers reached capacity and 

there was simply nowhere for freight to go. So 

dramatic was the hit to shipping in the early 

days of the pandemic, the ability of ocean 

carriers to survive this pandemic was being 

questioned.

The second phase began in August, when 

cargo volumes increased dramatically to meet 

demand in the United States and the need 

to restock inventory to the point where, at 

some ports, records were set for the number 

of loaded import containers handled. There 

is no immediate change to this situation in 

sight and predictions are that carriers will 

continue to operate ships filled to capacity 

into the first quarter of 2021, at the very least. 

Carriers responded to this increased demand 

by restoring service and deploying as many 

vessels as they were able to put into service. 

Similarly, shipping companies and intermodal 

equipment companies have been aggressively 

purchasing new containers to meet demand. 

Despite these efforts, both space on ships and 

the containers needed to move commodities 

have been in short supply, leading to rates on 

the spot market that have been uncharacteristically and historically high. The Commission 

responded to questions about carrier behavior 

by increasing its monitoring of ocean carrier 

alliances and increasing the reporting requirements alliances must meet. The Commission 

remains vigilant for any indication of anticompetitive behavior on the part of shipping 

companies. The Commission will act quickly 

and decisively if it determines any parties are 

not complying with their legal obligations.

In March, the Commission launched Fact 

Finding 29, charging Commissioner Rebecca 

F. Dye with examining COVID-19 related 

impacts to the supply chain and identifying 

operational solutions to cargo delivery system 

challenges related to the pandemic. As Fact 

Finding Officer, she convened Supply Chain 

Innovation Teams to identify what steps could 

be taken to clear cargo that was accumulating 

at ports, particularly at the Southern California 

gateways. In the following months, Commissioner Dye examined conditions at the Port 

of New York and New Jersey, and the Port 

of New Orleans. Additionally, she conducted 
12 59th Annual Report

individual interviews with shippers, carriers, 

and MTOs to better understand how supply 

chains were being adjusted in response to 

changing trade volumes. In November, the 

Commission approved a Supplemental Order 

to Fact Finding 29 expanding the authority of 

Commissioner Dye as the Fact Finding Officer 

and directing her to examine whether certain 

policies and practices of ocean carriers operating in alliances and calling the Port of Long 

Beach, the Port of Los Angeles, or the Port of 

New York and New Jersey violate 46 U.S.C. 

§ 41102(c), commonly referred to as 10(d)(1) 

of the Shipping Act, the prohibition against 

unjust or unreasonable practices and regulations. Furthermore, an advisory to the trade 

was issued counseling shippers and truckers 

they may contact the Commission’s Bureau of 

Enforcement with allegations of ocean carriers 

and MTOs 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 FMC that addresses 

detention and demurrage. 

Action taken by the Commission related 

to COVID-19 was not limited to Fact Finding 

29. The Commission provided, and extended, 

temporary relief to carriers and shippers by 

permitting service contracts to be filed up to 

30 days after becoming effective. Originally 

granted as regulatory relief associated with 

information developed through Fact Finding 29, the Commission determined that 

providing such relief permanently would be 

beneficial to the trade community, while not 

impeding the Commission’s ability to perform 

its oversight and monitoring activities. A rulemaking process has been initiated to establish 

this change and the Commission anticipates 

finalizing this regulatory reform by mid-2021. 

Responding to COVID-19 has meant that 

the Commission needed to adjust its operations as an agency. In the spring, as the 

pandemic spread from China to the United 

States, the Commission implemented a maximum telework policy to allow its employees 

to work from home if they elected to do so. 

Information technology investments that 

the Commission made in past years for the 

workforce paid dividends, in that the agency 

has continued its operations without disruption and with no adverse consequences to its 

stakeholders. The Commission will work to 

identify any gaps in the information technology infrastructure that allows for continuity 

of operations and address those requirements. 

From the experience of operating through 

COVID-19, however, it would appear any 

such additional resources will be minor and 

easily addressed. 

During fiscal year (FY) 2020, the FMC acted 

in several different and substantial rulemakings that amended how the agency conducts 

its business, provided regulatory relief to 

industry, and issued guidance to the trade 

related to detention and demurrage charges. 

More specifically, key rulemaking activity 

included: 

•  Incorporating in regulation statutory 

provisions of the Frank LoBiondo 

Coast Guard Authorization Act of 2018 

that addressed the FMC. The changes 

included amending regulations as 

they relate to Commission meetings, 

the activities of Ocean Transportation 

Intermediaries, and the confidentiality 

of comments filed in association with 

agreements:

•  Revising its delegations to the Bureau 

of Enforcement and its procedures 
59th Annual Report 13

for initiating enforcement action to 

facilitate Commission oversight of 

enforcement procedures and to allow 

for response from subjects of investigation earlier in the process;

•  Eliminating the requirement to publish service contract essential terms, 

as a partial grant of a petition filed by 

the World Shipping Council; and 

•  Publishing a final rule setting forth 

guidance on how the Commission 

will determine the reasonableness of 

demurrage and detention practices 

under 46 U.S.C. § 41102(c). 

International commerce now moves on 

information almost as much as it does on 

ships. The interaction between shippers and 

ocean carriers as well as between ocean carriers, other transportation providers, ports, or 

government agencies such as the FMC takes 

place online. Two new agreements filed at 

the Commission and now in effect create the 

conditions that permit for information that 

will facilitate cargo to flow more freely and 

effectively. Three technology related agreements were filed at the Commission in recent 

years, and as entities involved in international 

trade expand their embrace of technology to 

facilitate the movement of cargo, we may see 

additional such agreements filed at the agency.

An important part of the Commission’s 

statutory authority is to protect U.S. carriers 

from discriminatory and unfair trade practices 

of other nations. A petition filed at the FMC by 

the Great Lakes Carriers Association raising 

concerns about ballast water exchange regulations proposed by the Canadian Government 

led to the Commission launching an investigation into this matter in May. The initiation of 

an investigation does not equate with making 

a current determination that the proposed 

regulations are discriminatory; however, if 

the allegations are substantiated through the 

Commission investigation, then the Commission will be in position to act expeditiously.

The COVID-19 related impacts to the maritime sector are not limited to cargo shipping, 

the passenger cruise industry has also been 

adversely affected as a result of the cessation 

of their operations. In April, the Commission authorized Fact Finding 30 and charged 

Commissioner Louis E. Sola with engaging 

industry stakeholders to examine impacts to 

the cruise industry and to identify commercial 

measures cruise lines can adopt to mitigate 

COVID-19 related impacts to this sector of 

the maritime industry. Over the course of the 

year, Commissioner Sola has visited ports in 

Florida, Alaska, and Texas, in addition to holding virtual meetings to gather information in 

support of this Fact Finding. To date, he has 

published five reports chronicling his work, 

and in addition to briefing the Commission on 

his efforts, he has also provided briefings to 

officials at the most senior levels of the Department of Transportation and the Department of 

Homeland Security. His work has led to the 

Commission initiating a rulemaking process 

that may lead to the Commission amending its 

regulations concerning non-performance by a 

cruise line and dictating under what circumstances passengers must be provided a refund 

for a cancelled or delayed voyage. The Commission has not yet finalized this rulemaking 

and Commissioner Sola continues his work 

as Fact Finding Officer.

Also, under the Commission’s passenger 

vessel operator (PVO) program, in March, 

the FMC revoked the Certificate of Financial Responsibility and Indemnification of 
14 59th Annual Report

Passengers for Nonperformance of French 

America Line (FAL). As a result, FAL is prohibited from offering, advertising, or conducting 

cruises. 

Overall in the fiscal year, worldwide, the 

volume of container cargo declined by 3.3 percent in FY 2020 (October 1, 2019 – September 

30, 2020), down from 3 percent growth in the 

preceding fiscal year. In the U.S. liner trades 

(combined inbound and outbound), container 

cargo declined by 4.2 percent to 34.9 million 

TEUs, compared to 36.5 million TEUs last 

fiscal year. Globally, the nominal capacity of 

the containership fleet grew by 2.8 percent.

Looking to the year ahead, the availability 

of a vaccine against COVID-19 will mean that 

the United States and the world will return 

to a more normal order of life. While there 

may not be consensus on what shape the 

post-COVID-19 recovery will look like, there 

does seem to be agreement that there will be a 

recovery. There will be demand for products 

and for production inputs and those items 

will be shipped in containers aboard vessels. 

Working to ensure that the flow of commerce 

is not impeded by physical, operational, procedural, or regulatory obstacles will be critical. 

The FMC will do its part in both encouraging 

industry led solutions to improving supply 

chain performance while continuing to carry 

out its responsibilities to ensure competition 

and integrity for America’s ocean supply 

chain.
59th Annual Report 15

Efficiency and Competition

Strategic Goal 1

Maintaining a competitive and reliable 

international ocean transportation system 

and regularly scheduled liner trade by evaluating and monitoring the use of various 

types of agreement authority for anticompetitive effects is a primary function of the 

Commission. An efficient and competitive 

transportation system facilitates commerce, 

economic growth, and job creation. Competition among participants in U.S. liner trades 

fosters competitive rates and encourages a 

variety of service offerings for the benefit of 

U.S. exporters and importers, and ultimately 

consumers. 

The Shipping Act allows ocean carrier and 

marine terminal competitors to meet, discuss, 

and in some cases, cooperate on certain business issues, but first they must file a written 

agreement with the Commission. The Commission reviews agreements using traditional 

antitrust law principles and economic models 

to evaluate the potential competitive impact 

of a proposed agreement before it may go into 

effect. The initial review and analysis of a proposed agreement and subsequent monitoring 

of the members’ activities under the agreement, should it become effective, are designed 

to identify and guard against possible anticompetitive abuse of the filed authority, avoid 

unreasonable increases in transportation costs 

or decreases in transportation services, and 

address other activities prohibited by the Shipping Act. 

The Shipping Act is a federal competition 

law applicable to the industry of international 

liner shipping. It contains provisions similar 

to those found in the Sherman Act of 1890, the 

1914 Clayton Act, and the Robinson-Patman 

Act of 1936, concerning various prohibitions 

of discriminatory or unfair business practices 

and standards regarding business combinations. The Shipping Act creates a regulatory 

regime separate from Department of Justice 

enforcement of the antitrust law, under which 

collective carrier or MTO activity is evaluated when an agreement is initially filed, and 

closely monitored thereafter for any adverse 

impact on competition in the trade. 

So long as an agreement complies with the 

relevant Shipping Act and regulatory requirements, then the other federal antitrust statutes 

generally do not apply. Conversely, if a regulated entity violates the Shipping Act, they 

would be subject to penalties, and may, under 

certain circumstances, also be subject to investigation and prosecution under the full array 

of federal antitrust statutes.
16 59th Annual Report

Agreement Filings and Review

Under Sections 4 and 5 of the Shipping Act, 

46 U.S.C. §§ 40301–40303, all agreements by or 

among ocean common carriers to undertake 

any of the following are required to be filed 

with the Commission: 

• fix rates or conditions of service, 

• pool cargo revenue, 

• allot ports or regulate sailings, 

• limit or regulate the volume or character of cargo or passengers to be 

carried, 

• control or prevent competition, or 

• engage in exclusive or preferential 

arrangements. 

Except for certain exempted categories, 

agreements among MTOs, and those among 

one or more MTOs and one or more ocean 

common carriers, also must be filed with the 

Commission. 

In FY 2020, the Commission received 120 

agreement filings, including new agreements 

and amendments to, or terminations of, existing agreements. This activity represents a 

significant decrease in filings from the 170 

received in FY 2019. This reduction was likely 

due to the impact of the COVID-19 global 

pandemic, and not based on any significant 

changes in the ocean transportation industry.

Following its introduction in FY 2018, the 

Commission’s eAgreements electronic filing 

system experienced increased adoption within 

the industry. Consequently, in FY 2020, 100 

percent of agreement filings were received 

electronically. This adoption of an electronic 

option for securely filing agreements and 

associated documents represents a significant decrease in administrative burden on the 

Agreement Review Process

• Agreements become effective 

45 days after filing, unless the 

Commission has requested 

additional information to evaluate 

the competitive impact of the 

agreement. All agreements are 

reviewed according to the standard 

set in section 6(g) of the Shipping 

Act.

• The Commission has the authority 

to reject a pending agreement 

filing if it determines the filing 

fails to meet the Shipping Act and 

Commission regulations requiring 

filed agreements to be clear and 

definite, or if the filing is outside 

the Commission’s jurisdiction. 

• The Commission may seek to enjoin 

the operations of an agreement if 

it determines that the agreement 

could reduce competition to the 

point of unreasonably impacting 

the market or substantially lessen 

competition in the purchasing of 

certain covered services as defined 

in the LoBiondo Act.

• Effective agreements are exempt 

from U.S. antitrust laws, and 

instead, are subject to Shipping 

Act restrictions and Commission 

oversight.
59th Annual Report 17

industry, as well as Commission resources. 

FMC staff continues to seek terminations 

of outdated or expired agreements to ensure 

that the online library of filed agreements 

available to the public on the Commission’s 

website comprises an accurate representation of cooperation among ocean carriers and 

MTOs under the Shipping Act. With respect 

to active agreements, staff ensures that filed 

agreements remain current, both in their 

membership and authorities.

The FMC also evaluates new agreements 

under the provisions of 46 U.S.C. § 3503(b)

(1)(C), enacted in 2018 in the Frank LoBiondo Coast Guard Authorization Act, Pub. 

L. No. 115-282 (LoBiondo Act), regarding joint 

procurement or negotiation by carriers of certain covered services. All current agreements 

that contain authorities that could allow joint 

purchasing or negotiation of certain covered 

services are required to submit to the Commission any joint agreements reached under 

the authority. During FY 2021, the Commission will continue working with these 

agreements, as necessary, and refining the 

agreement review under the LoBiondo Act 

and analysis under the Shipping Act’s section 

6(g) standard.

At the end of the fiscal year, a total of 386 

agreements were on file and in effect with the 

Commission.
18 59th Annual Report

Competitive Impact and Monitoring

The following are examples of agreements 

filed with the Commission during the fiscal 

year, including specific Commission monitoring and actions taken to ensure compliance 

with the Shipping Act. Notably, new agreements between ocean carriers were filed to 

develop digitalized supply-chain platforms 

for the movement of container cargo using 

blockchain technology. 

The TradeLens Agreement: 

In February 2020, CMA CGM S.A., HapagLloyd AG, Maersk A/S, Mediterranean 

Shipping Company S.A., and Ocean Network 

Express Pte. Ltd. entered into a cooperative 

working agreement known as the TradeLens Agreement. The agreement authorizes the 

parties to cooperate on the provision of data 

to a blockchain-enabled, global trade digitized 

solution (known as TradeLens) that allows 

shippers, terminals, port authorities, and 

other stakeholders to exchange information 

on supply chain events and documents, and 

to collaborate with the TradeLens platform 

providers, International Business Machines 

Corporation (IBM) and Maersk GTD Inc., on 

TradeLens platform products and marketing. 

The TradeLens platform permits visibility to 

data describing the physical progress of cargo 

in the supply chain to those parties associated 

with that shipment. The agreement does not 

authorize the discussion of rates, terms or conditions of transportation, or vessel capacity. 

The Commission requires the parties to file 

minutes of agreement meetings and monitors the activities of the agreement, including 

changes to ownership of the TradeLens 

platform, and data access policies between 

IBM and Maersk GTD Inc. 

North Carolina-Virginia Port Terminal 

Cooperative Working Agreement:

 In March 2020, the North Carolina State Port 

Authority (NCPSA), Virginia Port Authority 

(VPA), and Virginia International Terminals 

LLC (VIT) entered into an agreement to discuss the potential for joint management and 

operation of an inland intermodal rail facility 

currently being constructed in North Carolina. Cargo handled at the facility will include 

cargo in foreign commerce moving to or from 

ports or marine terminal facilities in North 

Carolina or Virginia. Under the agreement, the 

parties are authorized to discuss and agree on 

matters relating to their respective operations, 

facilities and services, for the stated purpose 

of optimizing efficiency and improving the 

port and terminal services provided to the 

shipping public. Any agreement reached by 

the parties with respect to joint or cooperative 

operations would be filed with the Commission. The Commission monitors the activities 

of the parties through the minutes of meetings 

held under the agreement. 

Global Shipping Business Network 

Agreement: 

In July 2020, CMA CGM S.A., COSCO 

Shipping Lines Co. Ltd., Hapag-Lloyd AG, 

and Orient Overseas Container Line Limited 

entered into the Global Shipping Business 

Network Agreement (GSBN). The parties 

cooperate with respect to a separate non-profit 

joint venture that develops and operates a 
59th Annual Report 19

platform for all shipping supply chain participants to work collaboratively to accelerate 

technology innovation and develop solutions 

through a blockchain-enabled, global trade 

digitized process. Like the TradeLens platform, the GSBN platform provides application 

programming interfaces for the publication 

of, and subscription to, event data describing 

the physical progress of cargo through the 

supply chain and associated milestones. The 

parties do not have the authority to discuss 

rates, terms or conditions of transportation, 

or vessel capacity. Minutes of the parties’ 

meetings are required to be filed to monitor 

developments under the agreement.

Carrier Alliance Agreements

Monitoring Program

A core function of the FMC is the monitoring of ocean carrier alliance agreements 

filed with the agency. The FMC receives and 

evaluates exhaustive, commercially sensitive 

information from regulated entities, in this 

case, parties to an ocean carrier alliance agreement. That information is carefully analyzed, 

along with other information that permits 

FMC staff to determine trends in the marketplace and the potential for illegal behavior.

The Commission’s Bureau of Trade Analysis 

(BTA) has traditionally relied on a combination 

of individual vessel operator confidentially 

provided data and information from commercially available industry data to monitor 

and analyze container carrier freight rates and 

service market trends. 

The FMC’s section 6(g) (46 U.S.C. § 41307) 

review and oversight responsibility for filed 

agreements is ongoing and continues after 

a filed agreement has gone into effect. The 

FMC prioritizes its continuous monitoring 

of the 300 plus cooperative agreements currently filed with the Commission. The three 

major global carrier alliances are the top priority and receive the highest scrutiny. These 

three agreements have the greatest potential to 

cause or facilitate adverse market effects based 

on the agreement’s authority and geographic 

scope in combination with underlying market 

conditions. 

On an ongoing basis, the FMC monitors 

key economic indicators and changes to 

underlying market conditions for all global 

alliance agreements to detect any joint activity by agreement members that might raise 

and maintain freight rates above competitive 

levels, or unreasonably decrease services. For 

these agreements, FMC staff conducts more 

detailed reviews, and periodically presents 

current findings and recommendations to the 

Commission.

The Commission’s BTA has determined that 

given recent fluctuations in the markets, they 

need to receive key trade data directly from 

alliance carriers on a more frequent basis in 

order to better position staff economists to 

timely evaluate changes in the transpacific 

and transatlantic trades and report findings 

to the Commission.

Conditions in the Trade

At the end of FY 2020, the three global alliances, namely, THE Alliance, the OCEAN 

Alliance, and the 2M Alliance, controlled close 

to 90 percent of the vessel capacity in the two 

largest U.S. trades, the transpacific and the 
20 59th Annual Report

transatlantic. The transpacific trade encompasses cargo moving between Asia and the 

U.S., while the transatlantic trade includes 

cargo moving between Europe and the U.S. 

Collectively, the three alliances have market 

shares of 93 percent in the transpacific and 

90 percent in the transatlantic. Given these 

considerable market shares, the Commission 

closely monitors the alliance parties’ activities through its prescribed periodic reporting 

requirements and semi-annual meetings. 

During the fiscal year, the COVID-19 pandemic caused an initial decline in volume, 

followed by recovery. Cancelled sailings in 

the spring led to empty containers accruing 

on terminals, prompting some alliances and 

shipping lines to temporarily send megaships 

to the U.S. to retrieve them. Towards the end 

of FY 2020, the strong demand for U.S. imports 

(without a corresponding increase in demand 

for U.S. exports) led to container shortages in 

Asia and congested terminals at a number of 

major U.S. ports, according to press reports. 

Furthermore, this cargo surge contributed to 

backlogs at U.S. warehouses, which had been 

operating at lower capacity due to COVID-19 

labor restrictions, leading to containers being 

returned to marine terminals at a slower pace 

than is typical. 

Entering the fiscal year, a major concern 

for the alliances and other carriers were 

the IMO 2020 fuel requirements. The new 

requirements, which took effect January 1, 

2020, imposed strict emissions restrictions on 

bunker fuel. These required carriers to either 

use Very Low Sulfur Fuel Oil (VLSFO), or 

in lieu of VLSFO, the carriers could elect to 

install industrial scrubbers on vessel exhaust 

systems which clean the exhaust from standard heavy fuel oil. Before the COVID-19 

pandemic, this requirement was a major concern because VLSFO is generally much more 

expensive than heavy fuel oil (HFO). The large 

cost spread between VLSFO and HFO meant 

that carriers either needed to pay for more 

expensive fuel, or install expensive industrial 

scrubbers; however, these concerns did not 

materialize, because COVID-19 introduced 

shocks to the petroleum market, closing the 

gap between VLSFO and HFO prices. 

Vessel capacity utilization continues to be 

higher in the headhaul trades (trade lanes generating the highest revenues, and generally 

those with the greater cargo volume) compared to the backhaul trades (the trade lane 

direction that carries both less cargo volume 

and generally cargo of lower value). More specifically, in the major east-west U.S. import 

and export trades (Asia-U.S. Pacific Coast and 

Europe-U.S. Atlantic Coast), the higher value 

cargo headhaul is Asia eastbound to the U.S. 

and Europe-westbound to the U.S. From a 

volume perspective, the trades are also imbalanced, with more loaded containers entering 

the U.S. from Asia, than U.S. export loads 

bound for Asia. A similar imbalance exists 

in the transatlantic trade, with more loaded 

containers arriving at U.S. Atlantic and Gulf 

ports than U.S. exports to Europe. The largest 

ocean carriers operate in the global alliances 

as discussed below.

Maersk/MSC Vessel Sharing Agreement (2M Alliance): 

The 2M Alliance consists of Maersk 

Line (headquarters-Denmark) and MSC 

(headquarters-Switzerland), the largest 

and second-largest ocean carriers by global 

Twenty-foot Equivalent Unit (TEU) capacity. At the end of FY 2020, the 2M Alliance 
59th Annual Report 21

accounted for approximately 33% of all global 

container capacity. The 2M accounted for: 19% 

of the transpacific U.S. import trade, and 19% 

of the transpacific U.S. export trade. In the 

transatlantic, 2M has 41% of U.S. the import 

trade and 33% of the U.S. export trade.

The COVID-19 pandemic dominated 

market developments and 2M Alliance’s competitive environment throughout the year. 

Much like the other global carrier alliances, 

the 2M Alliance cancelled and suspended 

numerous sailings and service strings in 

early Spring 2020 in anticipation of decreased 

freight demand. Over the fiscal year, the 2M 

Alliance cancelled 20 sailings and suspended 

three service strings due to the pandemic. The 

2M Alliance suspended its USWC3 string from 

April to June, its USEC3 from April to July, 

and its TA4 from April through and beyond 

the end of the fiscal year. 

As demand and freight rates increased, the 

2M Alliance quickly resumed two of these service strings, and additionally, launched new 

services. In July and August, after resuming 

its previous transpacific service suspensions, 

2M introduced two new transpacific U.S. West 

Coast (USWC) service strings; the first new 

string has five vessels totaling approximately 

43,000 TEUs, and the second has six vessels 

totaling approximately 51,000 TEUs. 

A significant development for the 2M Alliance during the fiscal year was the shift in a 

vessel sharing partner. Specifically, in early 

2020, the 2M Alliance’s vessel sharing agreement with Hyundai Merchant Marine (HMM) 

expired, and shortly thereafter, the 2M Alliance and SM Line entered into a new vessel 

sharing agreement. Initially, the new agreement was a six-vessel transpacific USWC route 

utilizing four vessels (each 11,500 TEUs) from 

the 2M Alliance and two vessels (each 11,500 

TEUs) from SM Line; however, shortly after 

the service was initiated, it was suspended 

from April through June due to the COVID19 pandemic. The vessel sharing agreement 

resumed in June after the associated USWC 

service was resumed. 

OCEAN Alliance Agreement: 

Three ocean carriers make up the OCEAN 

Alliance (OA); CMA CGM (including its 

affiliate APL) (headquarters-France), COSCO 

(including its majority-owned affiliate OOCL) 

(headquarters-China), and Evergreen (headquarters-Taiwan). Together these carriers 

operate several services branded under the 

OCEAN Alliance banner that encompass the 

major east-west trade lanes, including the 

transpacific, transatlantic, and Asia-Europe 

trades. At the fiscal year’s end, the OCEAN 

Alliance accounted for approximately 29% 

of all global container capacity. The OCEAN 

Alliance accounted for: 43% of the transpacific 

U.S. import trade and 43% of the transpacific 

U.S. export trade. In the transatlantic, Ocean 

Alliance has 19% of the U.S. import trade and 

21% of the U.S. export trade.

Pursuant to CMA CGM Group’s brand 

and network restructuring earlier in 2020, 

beginning on October 1, 2020, APL no longer 

receives set capacity allocations on OA U.S. 

trades. Focusing now on its US-Flag services 

to the US Government, APL may from time 

to time get capacity on OA services on an “as 

used” basis only. 

To address the decrease in demand due the 

COVID-19 pandemic, the alliance parties as 

a group began canceling (or blanking) sailings, particularly 34 in the month of February, 

which registered the highest number of sailing 
22 59th Annual Report

cancelations of any month in the eastbound 

transpacific. A high number of sailing cancellations was expected in February due to 

the closing of factories related to the Chinese 

Lunar New Year celebrations, but this record 

number is mostly attributed to the adverse 

effects of the COVID-19 pandemic. When 

cargo volumes in the trades recovered later 

in the fiscal year, the alliance parties reduced 

its cancelled sailings and even reinstated 

some sailings that had been scheduled to be 

cancelled.

The carriers also amended their agreement to add the nations of India, Bahrain, 

Iraq, and Oman and reconfigured their services to include port calls in these countries. 

A major reason behind this is predominantly 

the strong demand from Southeast Asia, supported by the source shifting from China to 

Southeast Asia.

THE Alliance Agreement: 

THE Alliance (THEA) is comprised of 

four members Hapag-Lloyd (headquarters-Germany), Hyundai Merchant Marine 

(HMM) (headquarters-South Korea), ONE 

(headquarters-Japan), and Yang Ming (headquarters-Taiwan). THE Alliance members 

accounted for 19% of the global container 

capacity in FY 2020. THEA accounted for 

29% of the transpacific U.S. import trade and 

34% of the transpacific U.S. export trade. In 

the transatlantic, THEA has 30% of the U.S. 

import trade and 36% of the U.S. export trade.

HMM joined THE Alliance in April 2020; 

previously, the carrier swapped container slots 

and purchased space on 2M services. Upon the 

addition of HMM, THEA began to offer an 

additional service sailing between Asia and 

the Pacific Southwest, using six vessels that 

collectively total 60,000 TEUs. Notably, HMM 

does not participate in THEA’s transatlantic offerings nor do they offer service in that 

region outside of THEA. 

As with the other global carrier alliances, 

THEA adjusted its carriers’ operations significantly with the global outbreak of COVID-19, 

instituting blank sailings and temporarily 

reducing the frequency of some of their services. During the fiscal year, these carriers 

collectively cancelled 148 sailings across their 

transpacific and transatlantic services. THEA 

reduced the frequency of several of their services during the initial wave of the COVID-19 

pandemic and gradually returned these services to their pre-COVID-19 levels over the 

summer and fall. The carriers have introduced 

no new services since HMM joined in April.

THE Alliance also engages in a slot 

exchange agreement with Zim encompassing the Mediterranean-U.S. East Coast trade. 

THEA carriers also operate a vessel sharing 

agreement with some members of OCEAN 

Alliance in this trade as well. 
59th Annual Report 23

Tariffs, Service Contracts, NSAs, & MTO 

Schedules

Tariffs

The Shipping Act requires common carriers 

and conferences to publish their tariffs containing rates, charges, rules, and practices, 

electronically in private systems. For ease of 

public access, the Commission publishes the 

web addresses of those tariffs on its website. 

At the close of FY 2020, 6,048 tariff location 

addresses were posted. Of that number, 5,900 

tariff location addresses were for NVOCCs.

Tariff Exemptions – NRAs and 

NSAs

The Commission provides regulatory relief 

from its NVOCC rate tariff requirements by 

exempting licensed and foreign registered 

NVOCCs when using NVOCC Negotiated 

Rate Arrangements (NRAs). In August 2018, 

the Commission provided further regulatory 

relief to NVOCCs by significantly expanding the commercial flexibilities available to 

NVOCCs and their shippers under NRAs (see 

Docket No. 17-10). NVOCCs have indicated 

that NRAs, which are not required to be published or filed with the Commission, are a less 

burdensome commercial pricing option than 

rate tariffs, which must be published, saving 

them time and reducing costs. 

At the end of the fiscal year, there were a 

total of 5,900 licensed NVOCCs. Of this total, 

2,173 (37%) had filed a prominent notice or rule 

in their respective tariff indicating that they 

had invoked the NRA exemption as an alternative to rate tariff publication. The majority 

of NVOCCs which have implemented NRAs 

continue to use a combination of NRAs and 

tariff rate filings, whereas, 190 NVOCCs have 

opted to use the NRA exemption exclusively 

and do not publish tariff rates. 

Commission rules also granted regulatory 

relief from rate tariff requirements by allowing 

NVOCCs to offer transportation services pursuant to individually negotiated, confidential 

service arrangements with customers, termed 

NVOCC Service Arrangements (NSAs), rather 

than under a published tariff. The Commission 

expanded this regulatory relief to NVOCCs by 

eliminating the requirement to file NSAs and 

their amendments with the Commission as of 

August 22, 2018 (also see Docket No. 17-10). A 

total of 1,272 NVOCCs have opted to publish 

a tariff rule in their respective tariff indicating 

they reserve the right to use the NSA option 

as an alternative to rate tariff publication.

Service Contracts 

Service contracts enable carriers and shippers to tailor transportation services and rates 

to their commercial and operational needs and 

to keep these arrangements confidential. While 

the majority of cargo volumes transported 

in the major U.S. liner trades move under 

service contracts, as an alternative to tariffs, 

ocean carrier use of tariffs versus service contracts varies by carrier and trade lane. Of the 

139 active ocean carriers in the U.S. trades at 

the end of FY 2020, 81 filed service contracts 

with the Commission during the fiscal year, 

employing a blend of service contracts and 

tariffs. The remaining 58 ocean carriers solely 
24 59th Annual Report

used tariffs in rating their cargo. During the 

fiscal year, the Commission received 45,164 

new service contracts, compared to 47,214 in 

FY 2019, and 779,884 contract amendments, 

compared to 752,090 in FY 2019. 

The Commission granted regulatory 

flexibilities for service contracts through 

a rulemaking in Docket No. 16-05 which 

addressed commercial issues raised by 

contracting parties without compromising 

regulatory oversight. As part of this regulatory relief, ocean carriers were allowed up to 

30 days to file service contract amendments 

after agreement by the ocean carrier and the 

shipper, along with expanded timelines for 

correcting service contracts.

In FY 2020, the COVID-19 pandemic had a 

significant impact on the global supply chain, 

including service contract negotiation and 

implementation. To allow contracting parties 

time to adapt to the increased pressures from 

COVID-19 and minimize disruptions to the 

contracting process, the Commission issued 

a temporary blanket exemption on April 27, 

2020, extending the filing flexibilities for service contract amendments to original service 

contracts, and later extended that relief to June 

1, 2021 (see Docket No. 20-06). The Commission granted further regulatory relief to ocean 

carriers during the fiscal year by eliminating 

the requirement that carriers publish the 

essential terms of individual service contracts, 

resulting in cost savings to the industry (see 

Docket No. 20-02).

Marine Terminal Schedules

An MTO may voluntarily make available to 

the public a schedule of rates, regulations, and 

practices, including limitations of liability for 

cargo loss or damage, pertaining to receiving, 

delivering, handling, or storing property at 

its marine terminal. An MTO schedule made 

available to the public is enforceable by an 

appropriate court as an implied contract without proof of actual knowledge of its provisions. 

During the fiscal year, 3 new MTOs registered 

with the Commission, however, it was determined during the fiscal year that 21 entities 

were no longer operating as MTOs, thereby 

decreasing the total to 263 MTOs actively registered through Form FMC-1. MTOs report 

the electronic location of their MTO terminal 

schedules through the filing of Form FMC-1, 

with 172 MTOs electing to voluntarily publish 

their terminal schedules. The internet address 

of these MTO terminal schedules are posted 

on the Commission’s website.

The Commission issued a temporary blanket exemption on April 27, 2020, allowing 

ocean carriers up to 30 days to file service 

contract amendments after agreement by 

the ocean carrier and the shipper.
59th Annual Report 25

International Cooperation

Global Maritime Forum Annual 

Summit in Singapore

In October 2019, Commissioner Maffei 

attended the Global Maritime Forum Annual 

Summit in Singapore. In addition to the Commission’s participation in the Summit, which 

brought together various industry stakeholders and regulators from around the world, 

Commission representatives visited the Port 

of Singapore. 

European Maritime Law Organization (EMLO) Conference in Limassol, 

Cyprus 

In October 2019, Commissioner Dye participated in the 25th annual European Maritime 

Law Organization (EMLO) Conference in 

Cyprus. EMLO is an independent organization that provides a neutral and independent 

forum for debate and research on EU maritime 

affairs. The Commissioner gave a presentation 

on international trade and competition challenges facing the FMC.

Several other international events and 

opportunities for international cooperation were cancelled or postponed due to the 

COVID-19 pandemic.

Commissioner Daniel B. Maffei and Mr. Lam Pin Min, the Singaporean Senior 

Minister of State in The Ministry of Health and the Ministry of Transport at 

the Global Maritime Forum.
26 59th Annual Report
59th Annual Report 27

Protecting the Public

Strategic Goal 2

The FMC engages in a variety of activities that protect the public from unlawful, unfair, 

and deceptive practices, that lead to financial harm. The Commission issues licenses for U.S. 

OTIs and registers foreign-based OTIs; ensures financial responsibility of all OTIs through 

bonding requirements; helps resolves disputes about the shipment of goods or the carriage of 

passengers; investigates and prosecutes unreasonable or unjust practices; and issues rulings on 

private party complaints that allege Shipping Act violations. In addition, the FMC ensures that 

passenger vessel operators maintain proper financial coverage to reimburse cruise passengers 

in the event their cruise is cancelled or to cover liability in the event of death or injury at sea.

Fact Findings 28, 29, & 30

During Fiscal Year 2020, the FMC authorized two Fact Findings, each tasked with 

exploring COVID-19 related impacts to the 

maritime industry. Fact Finding 29 (FF29) 

focused on international ocean transportation 

supply chain dislocations and Fact Finding 30 

(FF30) examined the passenger cruise industry.

International Ocean Transportation Supply Chain Engagement 

(Fact Finding 29)

In March, the Commission voted to establish Fact Finding 29: International Ocean 

Transportation Supply Chain Engagement, 

designating Commissioner Rebecca F. Dye 

as the Fact Finding Officer, and authorizing her to identify operational solutions to 

cargo delivery system challenges related to 

COVID-19. 

To aid in her efforts as Fact Finding Officer, the Order also authorized the creation of 

Supply Chain Innovation Teams, which Commissioner Dye had previously employed in 

Fact Finding 28, and the earlier “Supply Chain 

Innovation Initiative”. The Order provided for 

examination of issues related to supply chain 

visibility, chassis availability and chassis pools 

in the Memphis rail head, and demurrage and 

detention charges.

The global supply chain was already experiencing disruption from COVID-19 related 

impacts as the virus spread throughout China 

before it reached the United States in early 

2020. Widespread closures and quarantines in 

China shuttered factories, which had an associated impact on freight flows, port operations, 

and ocean carrier service offerings. 

In the earliest days of COVID-19 related 

impacts to the supply chain in the United 

States, import cargo volumes dropped precipitously and ocean carriers cut service 

offerings accordingly. The consequence 

was that domestic ports, particularly on the 

West Coast, became congested with import 

loads that were not being picked-up for final 

delivery and empty containers waiting to be 

repositioned to Asia. 
28 59th Annual Report

Making headway in addressing what was 

becoming an untenable situation was Commissioner Dye’s first priority. She convened 

Supply Chain Innovation Teams to identify 

what steps could be taken to clear cargo that 

was accumulating at ports, especially at the 

Southern California gateways. It was determined that simple steps surrounding shippers 

providing information to terminal operators 

about which shipments contained Personal 

Protective Equipment, which containers 

shippers wanted to accept and were willing 

to pick-up, and identifying what containers 

shippers were not able to accept would all 

make meaningful contributions to reducing 

cargo congestion on terminals. Finally, Commissioner Dye was engaged in working with 

ports and shippers to find available cargo 

storage locations for U.S. companies whose 

businesses were shutdown.

After identifying immediate steps that could 

be taken to address COVID-19 related port 

congestion in the San Pedro Bay, Commissioner Dye then engaged nine Innovation 

Teams to determine what underlying behavior or policies of carriers or marine terminals 

could be changed to improve efficiencies at 

U.S. seaport gateways for international ocean 

freight. The Innovation Teams reached consensus on four key measures to improve port 

performance:

1. Truckers should be directed to return 

empty containers to the terminal where 

they were picked up, allowing them 

to make dual moves and reduce the 

number of chassis required.

2. Notice of terminal gate closures should 

be given no less than three days, and 

preferably seven days, before gate closing. At no time should a closure occur 

mid-shift.

3. Notice of blank sailings should be given 

not only to beneficial cargo owners 

(BCOs), but also posted prominently on 

a carrier’s website, at least seven days 

in advance. Notice of bypassed ports 

should be posted at least 72 hours in 

advance.

4. Carriers and terminals should immediately seek to collaborate regarding 

Export Cargo Receiving Timelines.

Shippers on the Innovation Teams requested 

that the Commission’s service contract filing 

requirements be waived to allow shippers to 

use service contract provisions immediately, 

due to impediments to contract filing created 

by COVID-19 restrictions. The Commission 

voted to extend contract filing requirements 

for 30 days, effective until January 1, 2021. 

This contract filing relief was later extended 

by the Commission until June 1, 2021. A rule 

is pending before the Commission to make 

this relief permanent.

The Innovation Teams also recommended 

that FF29 adopt a regional port for the remainder of the FF29 discussions. The next phase 

of FF29 adopted this recommendation and 

focused on operations in the U.S. port gateways of Los Angeles, Long Beach, New York 

and New Jersey, and New Orleans.

Regional Approach to Fact Finding 29

In the months following the first phase of 

FF29, Commissioner Dye examined conditions 

at the Ports of Los Angeles, Long Beach, New 

York and New Jersey, and New Orleans. This 

was in addition to individual interviews she 

conducted with other shippers, ocean carriers, MTOs, truckers, and NVOs to understand 

the challenges they faced to manage logistics 
59th Annual Report 29

Commissioner Rebecca Dye (Left) receives Malcom McLean Award from Lisa 

Yakomin, President of Association of Bi-State Motor Carriers
30 59th Annual Report

Commissioner Sola in Seward, AK where he met with (L-R) Sonya Hibbetts and 

Jesse Groom of the ILWU and Christy Terry of the Alaska Railroad
59th Annual Report 31

operations as trade volumes surged. Commissioner Dye continues to encourage all U.S. 

international supply chain leaders to focus on 

the four port process goals identified in the 

first phase of FF29 and to continue to work 

together to find workable solutions to these 

challenges. 

Based on information obtained in the fact 

finding, the Commission became concerned 

that ocean carriers in alliances who call on 

the Port of New York and New Jersey or who 

call on the Port of Long Beach and the Port 

of Los Angeles may be employing unjust or 

unreasonable practices and regulations that 

could violate 46 U.S.C. § 41102(c). As such, 

in November, the Commission approved 

a Supplemental Order to Fact Finding 29 

expanding the authority of Commissioner Dye 

as the Fact Finding Officer. The Supplemental 

Order allows Commissioner Dye to investigate ocean carriers operating in alliances and 

calling the Ports of Los Angeles, Long Beach, 

or New York and New Jersey to determine if 

the policies and practices of the lines related 

to detention and demurrage, container return, 

and container availability for U.S. export cargoes violate 46 U.S.C. 41102(c). 

Commissioner Dye continues to encourage 

ocean carrier executives to become directly 

involved in port operations in Los Angeles, 

Long Beach, and New York and New Jersey 

to address port operations involving carrier equipment return. Commissioner Dye 

intends to conclude FF29 with Innovation 

Team discussions on container depots and 

cargo forecasting.

COVID-19 Impact on Cruise 

Industry (Fact Finding 30)

On April 30, 2020, the Commission voted to 

initiate Fact Finding 30: COVID-19 Impact on 

Cruise Industry. Commissioner Louis E. Sola 

was designated Fact Finding Officer, charged 

to investigate and report on the challenges 

that impacted the cruise industry and the 

ports that rely on the cruise business. 

Since launching the investigation in the 

spring, Commissioner Sola has traveled to 

ports in Florida, Alaska, and Texas. Additionally, he has held virtual meetings with 

individuals not only in those states, but in 

Alabama, Louisiana, Mississippi, Oregon, 

and Washington. His engagement with cruise 

industry stakeholders has led him to interview 

executives with ports, cruise lines, and labor 

organization; public officials at the local, state, 

and federal level; and, cruise passengers.

Commissioner Sola’s efforts have examined 

the consequences of the cessation of cruising 

on U.S. ports, as well as on related industries. 

By the close of the fiscal year, Commissioner 

Sola had published four reports: Licensing 

and Bonds; Refund Policy; Economic Impact 

of COVID-19 on the Cruise Industry in Florida; and the Economic Impact of COVID-19 

on the Cruise Industry in Alaska, Washington, 

and Oregon. A fifth report published in calendar year 2020 examines the economic impact 

to the Gulf Coast.

In addition to published reports, Commissioner Sola has provided in-person briefings 

to interested parties in the legislative and 

executive branches of government. He has 

spoken with Senators, Representatives, and 

Congressional staff serving on committees 

and in personal offices. Furthermore, he has 
32 59th Annual Report

provided briefings on his work to officials at 

the Secretary and Under Secretary levels of 

the Departments of Homeland Security and 

Transportation. 

To date, the Commission has acted on two 

recommendations made by Commissioner 

Sola. In July 2020, it issued a Policy Statement 

on Passenger Vessel Financial Responsibility 

that provided limited and temporary relief 

to small passenger vessel operators whose 

operations and business have been disrupted 

by the response to COVID-19. That relief will 

remain in effect until April 1, 2021. In October 2020, the Commission issued an Advance 

Notice of Proposed Rulemaking seeking comment on potential changes to regulations as 

they relate to non-performance by a cruise line 

and under what circumstances passengers 

may secure refunds. The Commission has yet 

to take final action in this matter.

In the coming fiscal year, Commissioner 

Sola will continue his review of impacts of 

COVID-19 on the cruise industry at other U.S. 

ports. A final report will be issued at an appropriate point detailing his findings and making 

recommendations, if any, about additional 

regulatory or legislative action that would be 

beneficial.

Investigation into Demurrage, 

Detention, and Per Diem Charges 

(Fact Finding 28)

In response to the Fact Finding Officer’s 

recommendations, the Commission voted to 

publish an interpretive rule that clarifies how 

the Commission will assess the reasonableness of detention and demurrage practices. 

That rule became final and effective on May 

18, 2020. On December 3, 2018, Commissioner 

Rebecca F. Dye delivered her final report in 

Fact Finding Investigation No. 28, a nonadjudicatory investigation, into the practices 

of ocean carriers and MTOS relating to U.S. 

demurrage, detention, and per diem charges. 

Demurrage is the charge per container for the 

use of ground space at the marine terminal. 

Detention is the charge by the ocean carrier 

for use of the container equipment. Per Diem 

relates to assessorial charges beyond demurrage and detention. All charges are subject to 

an agreed number of free days.

Licensing

There are two types of ocean transportation 

intermediaries that serve as transportation 

middlemen for cargo moving in the U.S.-foreign oceanborne trades: NVOCCs and ocean 

freight forwarders (OFFs). An NVOCC is a 

common carrier that holds itself out to the 

public to provide ocean transportation and 

issues its own house bill of lading or equivalent document but does not operate the vessel 

by which ocean transportation is provided. A 

U.S.-based OFF arranges for transportation 

of cargo with a common carrier (NVOCC 

or Ocean Carrier) on behalf of shippers and 

processes documents related to U.S. export 

shipments. However, an OFF does not hold 

itself out to the public to provide ocean transportation and does not issue a house bill of 

lading or equivalent shipping documents. 

All NVOCCs and OFFs located in the U.S. 

must be licensed by the Commission and 

must establish financial responsibility. To 

be issued a license, an OTI must provide the 
59th Annual Report 33

Commission evidence of experience in OTI 

activities in the U.S., the necessary character to render services, and proof of financial 

responsibility. In FY 2020, there were 4,819 

licensed NVOCCs and OFFs that maintained 

financial responsibility in the form of surety 

bonds on file with the FMC, collectively in 

excess of $452 million. These funds are held 

to pay any damages arising out of a licensee’s 

ocean transportation-related activities. 

Foreign-based NVOCCs that do business 

in the U.S. foreign trades are required to 

register with the Commission, and to have 

financial responsibility in the form of surety 

bonds. Registrants provide basic corporate 

contact information for the company. A foreign NVOCC may choose to become licensed 

if they wish. There are 1,784 foreign registered 

NVOCCs and 76 foreign licensed NVOCCs 

that maintain approximately $273 million in 

surety bonds on file with the FMC in FY 2020.

The Commission’s triennial renewal program for FMC-licensed OTIs was instituted in 

2017 to ensure accurate industry information. 

The Commission completed the first threeyear cycle of renewals on May 31, 2020. The 

online user-friendly renewal process prepopulates the OTI’s renewal form with information 

from the FMC’s files, providing a streamlined 

experience. In most cases, the renewal process 

takes only five minutes. The online renewal 

process has improved the accuracy of OTI 

records, and timeliness of reporting material changes in ownership and operations for 

the benefit of OTI sureties, carriers, and the 

shipping public. Foreign-registered NVOCCs 

must also renew their registrations every three 

years. 

The Commission has received inquiries 

from the industry regarding the Chinese 

government’s continued requirement for 

the Optional Rider for Additional NVOCC 

Financial Responsibility, to meet the Chinese government's financial responsibility 

requirements, and various articles have been 

published in the press indicating the Chinese 

government may be loosening the financial 

responsibility requirements for NVOCCs. The 

optional China bond rider originated from 

bilateral discussions between the United 

States and Chinese governments and a 2003 

agreement, which the Commission implemented through regulations in 2004. It is not, 

and never has been, required by the Commission. From the Commission’s perspective, 

the bond is optional and at the discretion of 

individual NVOCCs. As of the end of the fiscal 

year, the Commission had on file 405 Optional 

Riders with an approximate aggregated value 

of over $20 million.

Licensing Activity in FY 2020

• New OTI applications accepted: 375

• Amended applications accepted: 273

• New OTI licenses issued: 275

• Amended licenses issued: 85

• Licenses revoked or surrendered: 285

• New registrations accepted: 171

• Licenses renewed: 1456

• Registrations renewed: 535
34 59th Annual Report

Passenger Vessel Program

The passenger vessel operator (PVO) program administered by the Commission (46 

U.S.C. §§ 44102-44103), requires evidence of 

financial responsibility for vessels which have 

berth or stateroom accommodations for 50 or 

more passengers and embark passengers at 

U.S. ports and territories. Certificates of performance cover financial responsibility used 

to reimburse passengers in the event their 

cruise is cancelled. Certificates of casualty are 

required to cover liability that may occur for 

death or injury to passengers or other persons 

on voyages to or from U.S. ports. 

The maximum performance financial coverage requirement is currently $32 million per 

cruise line. The cap is adjusted every two 

years based on the Consumer Price Index 

for All Urban Consumers (CPI-U). The next 

adjustment will occur in 2021.

Notably this fiscal year, on March 20, 2020, 

after notice and hearing, the FMC revoked 

the certificate of performance for Great 

Northern & Southern Navigation Co., LLC, 

which does business as French America Line 

(FAL), a domestic passenger vessel operator, 

prohibiting it from offering, advertising, or 

conducting cruises. The Commission found 

that FAL failed to respond to lawful inquiries and requests for information, and that the 

company’s repeated failures to adhere to the 

requirements of its escrow agreement demonstrated it was not financially responsible. 

The PVO industry was impacted by COVID19, and a description of the Commission’s 

action to institute a Fact Finding Investigation 

as a result of the pandemic is described above .

At the close of FY 2020, 244 vessels owned 

by 52 passenger vessel operators were certified under the PVO program. The combined 

evidence of financial responsibility for nonperformance of transportation for all cruise 

vessels in the program is $791 million. Under 

the Commission’s program, there is $767 million in aggregate financial responsibility for 

casualty coverage. During the fiscal year, 12 

new performance certificates and 9 casualty 

certificates were issued. 

PVO Financial Coverage

• Aggregate evidence of financial 

responsibility for nonperformance: 

$791 million 

• Aggregate evidence of financial 

responsibility for casualty: $767 

million 

• New Performance Certificates issued: 

12 in FY 2020 

• New Casualty Certificates issued: 9
59th Annual Report 35

Consumer Affairs and Dispute Resolution

The Commission, through its Office of 

Consumer Affairs and Dispute Resolution 

(CADRS) provides alternative dispute resolution (ADR), ombuds (informal conflict 

resolution), and mediation services, to assist 

parties in resolving international ocean shipping and cruise disputes. These services are 

available to the shipping public at any stage 

of a dispute. The Commission’s ADR services 

help parties avoid the expense and delay 

inherent in litigation and facilitate the flow 

of U.S. foreign commerce.

This fiscal year, the Commission closed a 

total of 241 ombuds matters: 76 relating to 

commercial cargo; 36 involved shipment of 

household goods; and 129 cruise matters. 

The COVID-19 pandemic had a significant 

impact on the number of cruise ombuds matters handled by the Commission during this 

fiscal year. Of the 129 total cruise matters 

handled and closed by FMC staff, 108 were 

COVID-19 related. Commission staff handled 

2 non-cruise complaints (1 commercial cargo 

and 1 household goods) where it was alleged 

that the pandemic was a contributing factor 

to the dispute at hand. 

Eight mediation matters were concluded. 

CADRS staff attorneys also serve as presiding 

officers in special docket requests (no qualifying requests were received in this fiscal year). 

CADRS also responded to approximately 

1,730 general inquiries from the public during 

the fiscal year (a 52% increase from the previous fiscal year), 845 of which were related to 

COVID-19.

Highlights: 

•  In a dispute where it was alleged 

that an ocean carrier was unlawfully 

holding a shipper’s cargo based on 

a general lien for past due amounts 

on unrelated shipments, FMC staff 

assisted in facilitating an agreement 

where the ocean carrier agreed to 

release the held shipments and the 

shipper would pay the outstanding 

charges shortly thereafter.

•  In a dispute involving a significant amount of demurrage that had 

accrued at a foreign port, the FMC 

assisted the parties in reaching an 

agreement where the amount to be 

paid was reduced by approximately 

$238,000.

•  In a case where a significant amount 

of demurrage had accrued while an 

importer was resolving a dispute with 

its overseas manufacturer (which 

had shut down temporarily due to 

the COVID-19 pandemic), Commission staff assisted in facilitating 

communications to help the interested parties reach an agreement 

where the importer was allowed to 

pay a demurrage amount reduced by 

approximately $23,000.

•  In a dispute involving an importer who 

was required to pay a large amount of 

demurrage accrued in connection with 

an intensive customs examination, its 

initial attempts for mitigation were 

rejected by the ocean carrier. FMC 

staff assisted in contacting the ocean 
36 59th Annual Report

carrier to request reconsideration 

of the importer’s argument that the 

disputed demurrage charges should 

be refunded in light of the Commission’s recently issued interpretive rule 

on detention and demurrage. After 

reviewing the matter, the ocean carrier agreed to issue a full refund of 

the disputed charges. 

•  In a COVID-19 related cruise complaint, a passenger was denied a full 

refund and instead given a Future 

Cruise Credit, as he was unable to go 

on a scheduled cruise for work-related 

reasons. The passenger was employed 

as a firefighter paramedic at the time 

and was notified that until further 

notice all Fire EMS personnel were 

banned from travel due to COVID19. Commission staff contacted the 

cruise line on the passenger’s behalf to 

request reconsideration and the cruise 

line agreed to issue a cash refund.

Enforcement, Audits and Penalties

The Bureau of Enforcement’s (BOE) 

attorneys, investigative analysts and the Commission’s Area Representatives (ARs) work to 

obtain industry compliance with the Shipping 

Act of 1984, as amended, as well as with the 

shipping statutes administered by the Commission. The Commission’s goal is to protect 

the public from unlawful and deceptive practices in the foreign oceanborne commerce of 

the United States. 

Over the course of the fiscal year, BOE and 

the ARs investigated and pursued illegal 

practices in the Transpacific, North Atlantic, 

Middle East, South American and Caribbean 

trades. These practices included:

•  Cargo misdescription and 

misdeclaration;

•  Unlawful access to a service contract ;

•  Transportation of cargo by ocean carriers and licensed NVOCCs to entities 

performing or advertising OTI services that have not obtained a license, 

financial responsibility or published 

tariffs; and

•  OTI license revocation for fixing ocean 

transportation intermediary prices in 

violation of the Sherman Act and the 

Shipping Act.

As of the beginning of FY 2020, 7 enforcement cases were pending final resolution 

and there were 7 matters pending which 

BOE was monitoring or providing internal 

legal advice. Inclusive of cases opened at 

headquarters, 26 new investigative matters 

were referred to BOE by ARs for enforcement 

action or informal compromise, and 25 matters were administratively closed or referred 

for formal proceedings. At the end of the fiscal 

year, BOE had 26 enforcement cases pending 

resolution. The Formal Investigations section 

of this report includes information on formal 

proceedings, including two cases litigated by 

BOE this year.

The Commission’s compliance audit 

program is carried out by BOE industry analysts. The analysts review the operations of 

NVOCCs and ocean freight forwarders, identify elements of their operations that are not 

in compliance with statutory or Commission 
59th Annual Report 37

regulatory requirements, and provide guidance to help bring them into compliance. The 

audit program also includes review of entities 

that hold themselves out to be ocean carriers 

but who do not appear to conduct vessel operations. Although non-ocean carriers entities 

may issue bills of lading and other documents, 

the absence of vessel operations might indicate, among other Shipping Act violations, 

that they are operating as unlicensed OTIs. 

During the fiscal year, the analysts opened 122 

audits and completed 130 (including audits 

carried over from fiscal year 2019), with 8 

audits pending as of September 30, 2020.

Enforcement Procedures Amended

In FY 2020, the Commission voted to make 

the most significant changes to its enforcement 

procedures since 1988. The Direct Final Rule 

became effective on December 23, 2019, and 

amended the process to: (1) provide notice to 

the subject of investigations and allow them 

the opportunity to respond before BOE recommends that the Commission take enforcement 

action; (2) require Commission approval to 

initiate formal or informal action; and (3) 

require Commission approval of proposed 

compromise agreements. 

The new pre-enforcement process includes 

notice to the subject of an investigation that 

BOE has determined, based upon information 

developed in the investigation process, to 

recommend that the Commission initiate 

enforcement action. The FMC’s new process 

was modeled after the U.S. Securities and 

Exchange Commission’s Wells process. An 

opportunity is given for the subject of the 

investigation to submit a written statement to 

BOE that will be included in BOE’s recommendation to the Commission. The Commission’s 

review process continues and may result in 

additional guidance or internal enforcement 

policies to facilitate implementation.

During the ongoing review and implementation of these new enforcement procedures, 

formal and informal civil prosecutions by 

the Bureau of Enforcement have significantly 

slowed, as staff and the Commission gain 

experience with the new processes/procedures. 

As a result, no cases involving compromise 

payments were completed during Fiscal Year 

2020, and no Civil Penalties were assessed or 

collected.

The Commission cooperates on a regular basis with other federal, state and local 

transportation and law enforcement agencies through established memoranda of 

understanding (MOU), collaborations and 

partnerships addressing specific transportation related policies, issues, or incidents 

involving U.S. domestic and international 

liner shipping. 

Inter-Agency Cooperation

Law Enforcement

Collaboration between the Commission 

and the U.S. Customs and Border Protection 

(CBP) on the exchange of investigative information continues to enhance and safeguard 

our Nation’s global economic competitiveness. 

Cooperation with CBP included staff interactions and joint field operations to investigate 

entities suspected of violating each agencies’ 

statutes or regulations. This cooperation also 

includes local police and other government 

entities, the U.S. Attorney’s Office, the Federal 
38 59th Annual Report

Bureau of Investigation, and when necessary, 

Immigration and Customs Enforcement (ICE).

The Commission completed its eighth year 

under a formal MOU with the Census Bureau, 

U.S. Department of Commerce, which provides the FMC with access to the Census 

Automated Export System (AES) database - 

a database used to review confidential U.S. 

export shipment data for law enforcement 

purposes. The Commission also continued 

its membership in the National Intellectual 

Property Rights Coordination Center (IPR 

Center), led by Homeland Security Investigations (HSI), a partnership of 21 federal and 

international agencies targeting intellectual 

property and trade-related crimes. 

The Commission’s Area Representatives 

participated in several federal law enforcement initiatives sponsored by other federal 

agencies: the U.S. Department of Homeland 

Security (CBP, ICE, U.S. Coast Guard), the 

U.S. Department of Transportation’s (Federal 

Motor Carrier Safety Administration); the U.S. 

Department of Commerce (Bureau of Industry 

and Security); the U.S. Department of Justice 

(including the Bureau of Alcohol, Tobacco, 

Firearms and Explosives, and the FBI); and 

interagency Joint Terrorism Task Forces operating regionally in the U.S. 

The law enforcement activities included 

criminal and civil investigations of entities 

licensed or regulated by the FMC, as well as 

violations of export and import statutes and 

regulations. Several ARs participated with 

CBP, Coast Guard, and other federal agencies 

in the annual Multi-Agency Strike Force Operations conducted at marine terminals at the 

ports of New York and New Jersey, Oakland, 

CA and Seattle, WA. The ARs aided these 

investigations by providing expert knowledge 

on ocean carrier and OTI practices, procedures 

and documentation related to shipping transactions. They also continued to work closely 

with state and local law enforcement agencies, 

including police jurisdictions in all six major 

port cities in a myriad of matters relating to 

international shipping, such as the export of 

stolen motor vehicles. 

Under the MOU between the FMC and the 

Federal Motor Carrier Safety Administration 

(FMCSA), Commission staff continued to 

participate in the FMCSA’s Moving Fraud 

Task Force and Moving Fraud Partnership 

initiatives. 

Maritime Policy and Multi-Agency 

Consumer Assistance 

The FMC also actively participates in the 

U.S. Committee on the Marine Transportation System (CMTS), a partnership of federal 

departments and agencies with responsibility 

for the Marine Transportation System (MTS). 

The CMTS is authorized by Congress to assess 

the adequacy of the MTS and coordinate federal maritime policy amongst the many federal 

maritime interests. The FMC’s Chairman sits 

on the Committee’s Cabinet-level Committee 

and the Commission is represented on the 

sub-Cabinet Coordinating Board and in the 

work of the various CMTS Integrated Action 

Teams and Task Teams.

The Commission works with other federal, 

state, and local jurisdictions on international 

ocean shipping issues. In 2020, the Commission was contacted by individuals with 

shipping and cruise-related complaints 

referred by the Attorney General offices in 

the states of Florida, Massachusetts and New 

York, as well as other state consumer protection agencies such as the Miami-Dade Office 
59th Annual Report 39

of Consumer Affairs and the Florida Department of Agriculture and Consumer Services. 

The Commission, through its CADRS staff, 

worked to resolve these issues. Where appropriate, the FMC also referred individuals to the 

Federal Motor Carrier Safety Administration 

for concerns related to domestic interstate 

moves. During FY 2020, the FMC also received 

and responded to twenty-five (25) requests 

from the offices of U.S. Senators and Congressmen on behalf of their constituents relating to 

shipping and passenger disputes.

Commissioner Carl W. Bentzel, seen at his confirmation hearing, joined the 

Commission on December 9th, 2019. 
40 59th Annual Report
59th Annual Report 41

Competitive Impact of Ocean 

Carrier Alliance Joint Purchases 

of Certain Covered Services

On December 4, 2018, the LoBiondo Act was 

enacted as Public Law No. 115-282. Among 

other changes, the LoBiondo Act placed 

restrictions on cooperation between or among 

ocean carriers and MTOs, including removing 

antitrust immunity for certain activities, prohibiting certain joint procurement activities, 

restricting overlapping agreement participation, and modifying the legal standard for 

enjoining agreements to jointly procure certain covered services, including:

•  the berthing or bunkering of a vessel;

•  the loading or unloading of cargo to 

or from a vessel to or from a point on 

a wharf or terminal;

•  the positioning, removal, or replacement of buoys related to the movement 

of the vessel; or

•  towing vessel services provided to a 

vessel.

The LoBiondo Act also amended 46 U.S.C. 

§ 46106 to require that the Commission annually provide to Congress: (1) an analysis of the 

competitive impact of ocean carrier alliance 

joint purchases of the covered services mentioned above; and (2) a summary of actions, 

including corrective actions, taken by the 

Commission to promote competition.

Additionally, the LoBiondo Act added a 

new standard in 46 U.S.C. § 41307(b) to evaluate the competitive impacts of agreements 

affecting the purchase of covered services. 

Specifically, the Commission may seek an 

injunction if it determines that an agreement 

is likely, “to substantially lessen competition 

in the purchasing of certain covered services.” 

46 U.S.C. § 41307(b)(1). This new legal standard may be applied to existing agreements 

as well as any agreements filed in the future. 

The LoBiondo amendments also added several new prohibited acts in 46 U.S.C. §§ 41104 

and 41105, including a prohibition against 

carriers jointly negotiating for towing vessel 

services and a prohibition against carriers 

jointly negotiating for the purchase of other 

covered services unless the negotiations and 

any resulting agreements are not in violation 

of the antitrust laws. 46 U.S.C. § 41105(5), (6).

Review of Agreements Under LoBiondo Act

The Commission reviews all new agreement 

filings to determine if they contain language 

authorizing activity that could potentially 

represent a reduction in competition in the 

purchasing of certain covered services. When 

such an agreement is identified, filing counsel 

for that agreement is sent a letter: (a) requesting that any agreements reached under this 

authority be provided to the Commission, 

even if they may be exempt from filing pursuant to 46 C.F.R. § 535.408; (b) reminding the 

parties that any agreements reached with third 
42 59th Annual Report

parties must be filed with the Commission 

unless those further agreements fall under 

one of the listed exemptions in 46 C.F.R. § 

535.408; and (c) reminding parties that agreements should clearly and definitively reflect 

the intentions of the parties, and that any 

authorities that the parties have not and do 

not intend to use, should be removed. This 

letter is similar to the ones sent to agreements 

already in effect when the LoBiondo Act was 

passed.

By the end of FY 2020, the Commission had 

sent letters to filing counsel for 176 agreements, 

including those previously in effect, identified 

under the preceding criteria. Responses have 

been received from all these agreements.

Forty-three of those agreements were identified as no longer active and were terminated; 

counsel for 126 agreements responded that 

these agreements had not jointly negotiated 

terminal services agreements; and three agreements were amended to reduce or remove any 

joint negotiation authority. At the beginning 

of FY 2020, two vessel sharing agreements 

maintained jointly negotiated terminal service 

agreements including covered services that 

required analysis under § 41307(b)(1). During 

the fiscal year, one of the two agreements 

allowed its joint terminal services agreement 

to expire, leaving one agreement warranting 

additional Commission review under the 

LoBiondo Act.

DOJ/FTC Guidelines for Collaborations Among 

Competitors 

The U.S. Department of Justice (DOJ) and the 

Federal Trade Commission (FTC) (collectively, 

the Agencies) have jointly issued guidance 

on the appropriate safeguards that should 

be implemented when market participants 

engage in joint purchasing. See Guidelines for 

Collaborations Among Competitors (2000) and 

Statements of Antitrust Enforcement Policy 

in Health Care (1996). Although the latter 

guidance initially was offered with respect 

to hospitals, the Agencies were mindful that 

this issue has broader, general applicability. 

Of note, DOJ Business Review Letters have 

since referenced the guidance in sanctioning 

joint purchasing arrangements outside of the 

health-care industry.

The Agencies determined that they would 

not challenge participation in purchasing 

groups, provided certain conditions were satisfied. To give participants in joint purchasing 

arrangements guidance as to when antitrust 

issues could begin to surface, the Agencies 

established a “safety zone.” As long as joint 

purchases account for less than 35 percent of 

the total sales (or output) of the purchased 

services in the relevant upstream market, 

and the cost of the jointly purchased services 

account for less than 20 percent of the buying 

group’s sales revenue in each relevant downstream market, the DOJ/FTC generally would 

consider any such arrangement to fall with 

the safety zone. These two thresholds are 

not hard and fast boundaries beyond which 

a buying group should not venture, rather 

they are general boundaries that, if crossed, 

would likely subject the group to increased 

antitrust scrutiny.

In the case of agreements between ocean 

carriers and terminal operators and/or stevedoring companies, the relevant upstream 
59th Annual Report 43

market is the market in which terminal and 

stevedoring services are sold by these providers and purchased by ocean carriers. The 

relevant downstream market consists of 

the ocean transportation services market in 

which the purchasing group (carriers) are 

competing to sell those services to shippers. 

When structured properly so as to produce 

efficiency-enhancing or pro-competitive 

outcomes, joint purchasing activities (i.e., 

agreements among purchasers/buyers) are 

lawful under U.S. antitrust laws, but arrangements that aim to simply fix the price that each 

purchasing group member will pay for the 

services rendered, are not legitimate under 

the antitrust laws. Additionally, an arrangement could run afoul of the antitrust laws if 

it includes other features that unduly restrict 

or distort competition. Other principles in the 

guidelines stress that group buying activity 

should not be used as a vehicle for exchanging 

commercially sensitive information between 

or among competitors, and that members 

should be free to make individual purchases 

outside the joint purchasing arrangement. 

In FY 2020, the Commission reviewed the 

terminal and stevedoring services agreements 

jointly negotiated by the remaining vessel 

sharing agreement noted above to ensure 

conformity with the DOJ/FTC guidelines 

for joint purchasing arrangements. Based on 

the Commission’s analysis, while this agreement engaged in joint purchasing of terminal 

and stevedoring services, it did so within the 

safe harbor guidelines for joint purchasing 

arrangements promulgated by the DOJ and 

FTC. Nevertheless, joint purchasing of covered 

services by the agreement parties warrants 

close monitoring to ensure that joint purchasing activity in the upstream and downstream 

markets continue to conform to the antitrust 

laws, and the FMC will continue to monitor 

this agreement for analysis under §§ 41307(b)

(1) and 41105(6). 

The following outlines the findings of the 

Commission’s review of the current joint purchasing agreement: 

The Commission applied the DOJ/FTC 

safety zone tests to assess the magnitude of 

combined purchases in the relevant market 

with respect to joint purchases of terminal 

and stevedoring services by members of the 

agreement, which required: (a) identifying 

each separate relevant port market in which 

the agreement purchased those services; (b) 

calculating the total output (or sales) in each 

such port market; and (c) calculating what 

percentage of the total output (or sales) in each 

such market was purchased by the agreement 

under jointly negotiated contracts. At the time 

of the review, using FY 2020 data, the agreement’s services and ports of call in the U.S. 

were identified. The agreement had jointly 

negotiated terminal and stevedoring services 

agreements at a number of the ports served. 

In terms of applying the DOJ/FTC safety zone 

test for combined purchases in the relevant 

markets, generally each individual port in 

this analysis was considered as the relevant 

(local) market for terminal and stevedoring 

services. Applying this rule produces the most 

conservative (i.e., strictest) application of the 

test. A broader definition of the relevant geographic market would lower the results of the 

test in percentage terms, thereby making it 

more likely the agreement would fall into the 

safety zone. However, exceptions to this rule 

were made where the ports are contiguous. 

Contiguous ports were considered as being 

in the same geographical market.
44 59th Annual Report

Traditionally, there are two competition 

issues of primary concern with respect to 

joint purchasing arrangements. First, if the 

parties have a significant degree of market 

power because their joint purchases account 

for a large proportion of total purchases in 

the market, a risk exists that the parties may 

drive the price of the services being purchased 

below competitive levels. The second competition issue of concern is that, if access to service 

providers is limited, there exists a risk of competing purchasers being excluded from the 

purchasing market. This event is most likely to 

develop where there are barriers to entry that 

prevent new service providers from entering 

the purchasing market or that prevent expansion by existing providers. Application of the 

safety zone threshold test for combined purchases of covered services by the members 

of the agreement in each relevant upstream 

market for terminal and stevedoring services 

showed that none of the upstream markets 

breached the threshold.

Turning to the second threshold test, members within the agreement compete on price 

in downstream ocean transportation markets; 

consequently, it is possible that equalization 

of costs for a jointly purchased input, such 

as terminal and stevedoring services, could 

reduce price competition in those markets 

if the cost to buy terminal and stevedoring 

services account for a significant percentage of the ocean carriers’ selling prices in the 

downstream markets. In applying the DOJ/

FTC safety zone test to this area of concern, 

each jointly purchased input is matched with 

each party’s sales revenue for the downstream 

product (i.e., ocean transportation services). 

Whether the cost of the jointly purchased 

services (i.e., the input of jointly procured terminal and stevedoring services) is 20 percent 

or more of each agreement member’s total 

sales revenue in each downstream market is 

then determined.

The agreement’s members were (and still 

are) competing with each other on prices in all 

of the downstream markets. The input value 

of joint purchases of terminal and stevedoring services as a percent of total sales in each 

downstream market was below the threshold 

of 20 percent. Under the Agencies’ guidelines, 

no further antitrust scrutiny was warranted. 
59th Annual Report 45

Photo courtesy of the Port of Los Angeles.
46 59th Annual Report
59th Annual Report 47

Developments in Major 

U.S. Foreign Trades

Worldwide

In the midst of the global COVID-19 pandemic, worldwide, the volume of container 

cargo declined by 3.3 percent in FY 2020 (October 1, 2019 – September 30, 2020), down from 3 

percent growth in the preceding fiscal year. At 

the end of September 2020, there were 140 idle 

containerships, down from 180 idle containerships a year ago. While market shares of the 

top global ocean carriers remained high, they 

were relatively unchanged from the preceding 

period. The top five carriers deployed 64 percent of the world’s containership capacity, and 

the top ten controlled 82.1 percent. The top 

three carriers, Maersk Line, MSC, and COSCO, 

deployed 17, 16, and 13 percent of the world’s 

containership capacity, respectively.

Overall, in the combined inbound and 

outbound U.S. liner trades, container cargo 

declined by 4.2 percent to 34.9 million TEUs, 

compared to 36.5 million TEUs last fiscal year. 

U.S. container exports declined by 4.7 percent 

to 11.6 million TEUs, and container imports to 

the U.S. dropped by 4 percent to 23.3 million 

TEUs. Container imports exceeded exports 

by a ratio of almost 2 to 1. The U.S. share of 

the world’s container cargo remained at 16 

percent.

Globally, the nominal capacity of the containership fleet grew by 2.8 percent. At the end 

of the fiscal year, 5,334 containerships, with a 

total fleet capacity of 23.5 million TEUs, were 

operational. There were 306 new containerships on order with an aggregate capacity of 

2.6 million TEUs, or 8.7 percent of the existing 

fleet capacity. Containerships with nominal 

capacities equal to or greater than 10,000 TEUs 

accounted for 37 percent of the existing fleet’s 

total capacity and 80 percent of the total capacity on order.

Asia 

21 Million TEUs

The liner trades between the U.S. and 

nations in Asia accounted for the largest container cargo volume of over 21 million TEUs 

in FY 2020 (exports and imports combined), 

or 61 percent of total U.S. container trade. The 

U.S. imported substantially more container 

cargo from the region than it exported. In FY 

2020, the U.S. imported 15.6 million TEUs 

of goods from Asia, a decrease of 5 percent 

over the previous fiscal year, while the U.S. 

exported 5.8 million TEUs, 3 percent less 

Worldwide volume of container cargo 

declined by 3.3%; capacity exceeded 

demand by 11.4% at close of FY.
48 59th Annual Report

compared to the prior year. Northeast Asia 

(China, Japan, South Korea, Taiwan, and Hong 

Kong) accounted for 46 percent of total U.S. 

container cargo, and Southeast Asia (Brunei, 

Cambodia, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam) accounted for 

15 percent. 

Just under half of the container imports 

from Asia moved through the ports of Los 

Angeles and Long Beach. U.S. Pacific ports 

handled 60 percent of all Asian imports and 

exports, and U.S. Atlantic and Gulf ports handled 40 percent. 

The original decline and subsequent recovery in volume due to the COVID-19 pandemic 

led to many shifts in this trade lane during 

the fiscal year. Initially, the pandemic caused 

a large, sustained decline in container volumes, leading to numerous cancelled sailings, 

adversely impacting operations at U.S. ports. 

These cancelled sailings led to empty containers accruing on terminals, prompting some 

shipping lines to temporarily send megaships 

to the U.S. to retrieve them. However, demand 

for U.S. imports picked up substantially in the 

summer, leading to shipping lines introducing 

several new services between Asia and the 

U.S. in the latter half of the fiscal year. The 2M 

Alliance, MSC (separately from 2M), Matson, 

and Zim each launched a new service during 

the fiscal year connecting Asia to the U.S. West 

Coast. Several lines noted that these new 

services would focus on e-commerce goods 

purchased on the internet after an increase 

in consumer demand for goods during the 

pandemic. Towards the end of the fiscal year 

however, the strong demand for U.S. imports 

(without a corresponding increase in demand 

for U.S. exports) led to container shortages in 

Asia and congested terminals at a number of 

major U.S. ports, according to press reports. 

Furthermore, this cargo surge contributed to 

backlogs at U.S. warehouses, which had been 

operating at lower capacity due to COVID 

labor restrictions, leading to containers being 

returned to marine terminals more slowly 

than is typical. 

Several notable changes among shipping 

lines and alliances had occurred in this market 

during the year. In April, Hyundai Merchant 

Marine formally joined THE Alliance. Simultaneously, the 2M Alliance entered into a vessel 

sharing and slot exchange agreement with 

South Korea-based SM Line between Asia 

and the U.S. West Coast. Furthermore, Pacific 

International Lines (PIL) exited the transpacific and U.S. trades in March.

North Europe

3.8 Million TEUs

The liner trade with North Europe is the 

second largest U.S. trade by volume, accounting for 3.8 million TEUs, or 11 percent of 

the total U.S. container cargo (exports and 

imports combined). The region of North 

Europe includes Iceland and all nations in 

North West/East Europe and Scandinavia. 

Asia accounts for 67 percent 

of containerized imports to the 

U.S. and 50 percent of containerized exports from the U.S.
59th Annual Report 49

Compared to the preceding period, U.S. container exports declined by 6.4 percent to 1.5 

million TEUs, and U.S. container imports 

fell by 5.3 percent to 2.3 million TEUs. The 

declines in cargo volume were largely due to 

the drop in demand caused by the pandemic 

and reciprocal tariff sanctions imposed on 

selected goods traded between the U.S. and 

EU member nations. In particular, the closure 

of bars and restaurants during the U.S. lockdowns hurt the demand of the top imported 

commodities of wine and beer from Europe. 

Nonetheless, beer, auto parts and furniture 

remained the top imported commodities, 

while used cars, woodpulp, and auto parts 

were among the top U.S. container exports. 

The cargo volume moved by Hapag Lloyd, 

MSC, Maersk Line and ONE accounted for 

64 percent of the total trade.

Carriers serving the trade reduced their 

vessel capacity in relation to the decline in 

demand. In April, parties to the 2M Alliance 

(Maersk Line and MSC) suspended their 

weekly TA4 loop service between U.S. Atlantic and North Europe ports. Parties to the 

other alliance agreements cancelled sailings 

in the trade, and in July 2020, CMA CGM and 

Marfret reduced the frequency of their North 

Europe-US-Oceania pendulum service from 

weekly to fortnightly. By the end of the fiscal 

year, the reduction in vessel capacity was 11 

percent in each trade direction, and the average utilization of capacity for the fiscal year 

was 82 percent inbound and 56 percent outbound. According to press reports, spot rates 

in the headhaul inbound direction declined 

by 10 percent to around $2,200 per 40-foot 

container (FEU) compared to the preceding 

fiscal year. Projections of cargo volumes in 

the transatlantic foresee some improvement 

in growth by the 2nd quarter of 2021.

In March 2020, the European Commission 

(EC) extended its block exemption regulations for consortia agreements between liner 

shipping carriers until April 25, 2024, when 

the regulations will again be reviewed. The 

EC concluded that the exemption was still 

effective at creating cost and operational efficiencies that allowed carriers to better deploy 

vessel capacity and offer customers more connections. European shippers opposed the 

extension.

Indian Subcontinent and Middle East

Combined 2.5 Million TEUs

The Indian Subcontinent and Middle East 

regions combined accounted for 7.3 percent 

of total U.S. container trade in FY 2020, with 

the Indian Subcontinent being the larger of 

the two. The Indian Subcontinent includes the 

countries of Bangladesh, Burma, India, Nepal, 

Pakistan, and Sri Lanka, and the Middle East 

includes a range of countries in Western Asia 

from Israel, Lebanon, and Syria in the West to 

Afghanistan in the East. Total trade for both 

the Indian Subcontinent and the Middle East 

was down, with the Indian Subcontinent trade 

decreasing 7.9 percent and the Middle East 

trade decreasing 5 percent. Total trade from 

the regions dropped from 2.7 million TEUs in 

FY 2019 to 2.5 million in FY 2020. 

Much of the decrease in trade was driven 

by lower export volume, with exports to the 

Indian Subcontinent falling 12.7 percent to 

678,000 TEUs and exports to the Middle East 

dropping 4.3 percent to 557,000 TEUs. Import 
50 59th Annual Report

volume from the Indian Subcontinent and the 

Middle East decreased as well but to a smaller 

degree, in total dropping by 4.9 percent to 1.3 

million TEUs. 

The direction of trade volumes for both 

the Indian Subcontinent and the Middle East 

remained unbalanced. For the Indian Subcontinent, container imports exceeded exports by 

a ratio of 1.5 to 1. Conversely, for the Middle 

East, container exports exceeded imports by 

a ratio of 2.1 to 1. 

Much like the rest of global trade, the 

Middle East and Indian Subcontinent were 

substantially impacted by the pandemic 

and associated recession. In addition to 

the region’s direct trade decline, the Suez 

Canal was also impacted a great deal by 

the pandemic. Although trade through the 

Suez remained stable until April, into and 

through the summer, monthly volumes fell 

to multi-year lows. Dry bulk and oil tanker 

traffic remained strong, buoying total traffic through the canal, but container trade 

collapsed during the summer. In response 

to these challenges, and to carriers’ renewed 

consideration of the Cape of Good Hope route, 

the Suez Canal Authority offered a number of 

pricing and rebate incentives over the spring 

and summer. The dynamics of the COVID-19-

era on the shipping industry have rekindled 

the competition between the Suez Canal and 

Cape of Good Hope trade routes. 

Central America and the Caribbean

2.1 Million TEUs

The Central America and Caribbean regions 

combined accounted for 6 percent of the total 

U.S. container cargo in FY 2020, or 2.1 million 

TEUs. Nations in Central America are Belize, 

Costa Rica, El Salvador, Guatemala, Honduras, 

and Panama, while the Caribbean are those 

island nations in the West Indies and Caribbean Sea, including the Bahamas, Dominican 

Republic, and Jamaica. Total cargo volume for 

Central America and the Caribbean declined 

in both regions and collectively was down by 

5.1 percent. Central American volume was 

double that of the Caribbean at 1.4 million 

TEUs (4 percent of U.S. trade) versus 700,878 

TEUs (2 percent of U.S. trade). 

Total cargo volume in Central America was 

down 5.2 percent in FY 2020. U.S. exports to 

Central America declined dramatically, falling 

by 13.2 percent to 543,550 TEUs while imports 

from the region to the U.S. increased modestly by 0.5 percent to 885,597 TEUs. Paper 

products account for the largest share of U.S. 

exports to the region followed by cotton, grocery products, used automobiles and fabrics. 

Fresh fruits are the top imported goods from 

the region. Major carriers serving the trade 

participate in the Central America Discussion 

Agreement (CADA), which is a voluntary rate 

discussion agreement. CADA members are 

Seaboard Marine, Crowley Liner Services, 

King Ocean Services, Dole Ocean Cargo 

Express, and Great White Fleet Liner Service 

Ltd.

For the Caribbean, total cargo volume fell 5 

percent in FY 2020. U.S. exports to the Caribbean fell 5 percent to 525,485 TEUs while 

imports from the region fell 4.8 percent to 

175,393. The economies of the Caribbean 

nations depend heavily on tourism, which has 
59th Annual Report 51

been brought to a halt by the pandemic. Lower 

trade volume from depressed economies will 

likely continue until tourism resumes. Carriers servicing the U.S./Caribbean trade routes 

participate in two rate discussion agreements 

covering geographically discrete areas: (1) the 

ABC Discussion Agreement (covering Aruba, 

Bonaire, Curacao, and Venezuela), and (2) the 

Caribbean Shipowners Association. 

In January 2020, COSCO entered into a 

vessel sharing agreement with CMA CGM 

to participate in its US Gulf-Caribbean-South 

America service. COSCO provides one 3,600 

TEU containership in combination with the 

eight vessels that CMA CGM deploys in this 

service. As trade conditions worsened due to 

the pandemic, in April 2020, the Caribbean 

and Central American Emergency Cooperative Working Agreement was formed, 

authorizing the parties to discuss and adjust 

their vessel capacity and services in the trade 

between the U.S. Atlantic and Gulf Coasts and 

Central America and the Caribbean. Parties to 

the agreement include Crowley Liner Services, 

King Ocean Services, and Seaboard Marine. 

South America

2.1 Million TEUs

The South America region accounted for 6 

percent of total U.S. container cargo in FY 2020, 

or about 2.1 million TEUs. The entire continent 

of South America is included in the region. 

Cargo volumes held steady between FY 2019 

and FY 2020, with a modest increase of 0.41 

percent. Exports to South America declined by 

3.36 percent to 910,883 TEUs, while imports 

grew by 3.51 percent to nearly 1.2 million 

TEUs. Leading U.S. container exports to the 

region included chemicals, automobile parts, 

and paper products. The top imports to the 

U.S included bananas, wood products, and 

coffee.

Only two ocean carriers (Seaboard Marine 

and King Ocean Services) remain in the West 

Coast of South America Discussion Agreement (WCSADA), which is a voluntary rate 

discussion agreement. Members of WCSADA 

faced increased competition from other major 

carriers. As noted, in January 2020, COSCO 

deployed a vessel and began sharing space 

through an agreement with CMA CGM on 

one of its services that includes ports in South 

America.

Mediterranean

1.8 Million TEUs

Container volume between the U.S. and the 

Mediterranean accounted for 5 percent, or 1.8 

million TEUs, of the total U.S. container cargo 

in FY 2020. Nations bordering the Mediterranean Sea comprise this region, including South 

Europe countries, Turkey, and Egypt. Conditions in this trade appeared to be less affected 

by the global pandemic than in other trades. 

Compared to the prior period, U.S. container 

exports declined by 3.5 percent to 457,543 

TEUs, while imports from the region, rose by 3 

percent to 1.3 million TEUs. Container imports 

exceeded exports by a ratio of 2.9 to 1. The top 

traded commodities remained the same; these 

were imported containers of wine, ceramic 
52 59th Annual Report

tiles, and furniture, and exported containers 

of woodpulp, cotton, paperboard, and nuts. 

The top four European-based carriers, MSC, 

Hapag Lloyd, Maersk Line and CMA-CGM, 

moved 79 percent of the total container cargo 

in the trade.

In April 2020, a new dedicated service was 

added to the trade through a vessel sharing agreement between COSCO, OOCL, 

ONE and Yang Ming. Under this new East 

Mediterranean-America (EMA) service, the 

carriers deploy six 4,500 TEU containerships 

on a weekly rotation between U.S. Atlantic 

ports and ports in Spain, Italy, Greece, Turkey, 

Israel, and Egypt. In other service changes, 

Hapag Lloyd reduced the frequency of its 

MGX service between U.S. Gulf and Mediterranean ports from weekly to fortnightly. 

By the end of the fiscal year, vessel capacity 

in the trade was up by 2 percent in each trade 

direction. 

Africa

476,415 TEUs

In FY 2020, imports and exports combined 

between the U.S. and Africa were 476,415 

TEUs, accounting for approximately 1.4 percent of all U.S. container volume. The Africa 

region includes all the nations on the continent except Egypt, which for container cargo 

is primarily served via the Mediterranean 

trade lane. Compared to the previous period, 

U.S. container exports to nations in Africa 

decreased by 4.9 percent to 347,499 TEUs, 

and U.S. container imports from the region 

decreased by 6.5 percent to 128,916 TEUs. 

Consequently, U.S. container exports exceed 

imports by a ratio of 2.7 to 1. 

The top container U.S. exports to Africa 

included automobiles and poultry, while 

swimwear, cocoa beans and citrus fruit were 

among the top import commodities. The 

Republic of South Africa is the largest U.S. liner 

trading nation on the continent, accounting for 

approximately 21 percent of the containerized 

cargo. MSC and Maersk Line, including its 

subsidiary Safmarine, moved 67 percent of 

the total container cargo in the trade.

Due to the pandemic, a number of services 

diverted their routes around the Cape of Good 

Hope over the summer. Deeply depressed fuel 

prices and increased freight rates have made 

the longer Good Hope route a viable option 

for carriers, who typically use the shorter Suez 

Canal. As noted, these dynamics have reinvigorated competition between the two routes.

Australia and Oceania

415,000 TEUs

Oceania consists of Australia, New Zealand, and the South Pacific Islands. The liner 

trades between the U.S. and Oceania comprised approximately one percent of the total 

U.S. container cargo in FY 2020, or 415,000 

TEUs. Compared to the preceding period, the 

volume of U.S. container exports declined 

by 4.2 percent to 230,712 TEUs, and the top 

exported commodities included auto parts, 

general merchandise, and tires. U.S. container 

imports from the region fell substantially by 
59th Annual Report 53

10.4 percent to 183,889 TEUs, and the top 

imported commodities included wine and 

fresh or frozen meat products. 

The U.S. Pacific-Oceania Agreement is one 

of the major vessel sharing agreements that 

remains operational in the trade. Parties to the 

VSA agreement are Maersk Line, Hapag Lloyd 

and ANL Singapore Pte. Ltd., a subsidiary of 

CMA-CGM. In May 2020, PIL terminated its 

space charter agreement with the VSA parties 

and exited the trade. 

In other service changes, in January 2020, 

Matson Navigation Co. Inc. entered into an 

agreement with Maersk Line for vessel space 

between U.S. Pacific ports and ports in Samoa 

and Tahiti. Also, under their vessel sharing 

agreement, in July 2020, CMA CGM and Marfret reduced the frequency of their pendulum 

service that includes the trade from weekly 

to fortnightly. 
54 59th Annual Report

Top Twenty U.S. Liner Cargo 

Trading Partners

The Foreign Shipping Practices Act, 46 

U.S.C. § 306 (b)(1), requires the FMC to include 

in its annual report to Congress “a list of the 

twenty foreign countries which generated the 

largest volume of oceanborne liner cargo for 

the most recent calendar year in bilateral trade 

with the United States.” 

The Commission derives its list of toptwenty trading partners from the Port Import 

Export Reporting Service (PIERS) database. 

The most recent complete calendar year of 

available data is 2019. The table on the next 

page lists the twenty foreign countries that 

generated the largest volume of oceanborne 

liner cargo in the bilateral trade with the 

United States in calendar year 2019. The figures in the table represent each country’s U.S. 

liner imports and exports combined in thousands of loaded TEUs. 

Bilateral trade with the United States’ toptwenty liner trading partners represented 

approximately 80 percent of the nation’s total 

liner trade in 2019. The total volume of trade 

with our top-twenty liner trading partners 

was about the same as in the preceding calendar year with a slight two percent increase.

The top-twenty list has been comprised of 

nearly the same trading partners since 2009. 

However, in 2019, there were some changes in 

the ranking order of the countries compared 

to the preceding period. China remained the 

U.S.’s top trading partner in 2019, accounting 

for 33 percent, or about 12 million TEUs, of 

the total volume of trade. Malaysia jumped in 

rank from 15 to 12, growing in cargo volume 

by 26 percent during 2019. Spain joined the 

top trading partners at the rank of 20 with a 

growth rate of 10 percent, while Honduras 

no longer ranked among the top 20. Notably, 

in terms of growth, trade with Vietnam (#2) 

increased by 26%, Thailand (#8) was up 14%, 

and Turkey (#19) was up 12%. Conversely, 

trade with China (#1) and Hong Kong (#16) 

declined by 11 and 14 percent, respectively. By 

region, half of the top 20 trading partners are 

countries located in Asia, seven are in Europe, 

and three are in South and Central America.

Malaysia, Guatemala, United Kingdom, Turkey, and Spain 

climbed up in the rankings, while Brazil, the Netherlands, 

Hong Kong, Chile, and Honduras slipped down.
59th Annual Report 55

Top Twenty U.S. Liner Cargo Trading Partners 

(CY2019)

Rank Country TEUs

(000)

1 China (PRC) 11,939

2 Vietnam 2,028

3 South Korea 1,639

4 Japan 1,404

5 India 1,365

6 Taiwan (ROC) 1,348

7 Germany 1,136

8 Thailand 897

9 Indonesia 798

10 Belgium & 

Luxembourg

780

11 Italy 711

Rank Country TEUs

(000)

12 Malaysia 685

13 Brazil 677

14 Netherlands 584

15 Guatemala 479

16 Hong Kong1 475

17 United Kingdom 433

18 Chile 426

19 Turkey 393

20 Spain 381

1 Hong Kong reverted to Chinese control 

in July 1997. However, PIERS continues to 

report data separately for Hong Kong due 

to its status as a major transshipment center.
56 59th Annual Report

Foreign Shipping Practices Act

The Commission has the authority to address restrictive foreign shipping practices under 

section 19 of the Merchant Marine Act of 1920 (46 U.S.C. ch. 421) and the Foreign Shipping 

Practices Act (46 U.S.C. ch. 423). Section 19 empowers the Commission to make rules and 

regulations governing shipping in the foreign trade to adjust or meet conditions unfavorable 

to shipping. The FSPA directs the Commission to address adverse conditions that affect U.S. 

carriers in the foreign trade and that do not exist for foreign carriers in the United States.

On March 6, 2020, the Commission received a petition from the Lake Carriers’ Association, 

a trade association made up of owners and operators of vessels on the Great Lakes, alleging 

that conditions created by Transport Canada, an agency of the Government of Canada are 

unfavorable to shipping in the United States/Canada trade under Section 19. In particular, the 

Lake Carriers’ Association asserted that Transport Canada’s proposed regulations requiring 

the installation of ballast water management systems on vessels loading or discharging ballast 

water in Canadian vessels would drive U.S.-flag vessels from the cross-lakes U.S. export trade 

with Canada. On June 16, 2020, the Commission issued a Notice of Investigation and Request 

for Comments. The comment period closed on July 22, 2020, and the Commission continues to 

gather information and consult with other federal agencies as it proceeds with its investigation.
59th Annual Report 57

Controlled Carriers

A controlled carrier is an ocean common carrier that is, or whose operating assets are, owned 

or controlled directly or indirectly by a foreign government. The Shipping Act provides that 

no controlled carrier may maintain rates or charges in its tariffs or service contracts that are 

below a level that is just and reasonable, nor may any such carrier establish, maintain, or 

enforce unjust or unreasonable classifications, rules, or regulations in those tariffs or service 

contracts. In addition, tariff rates, charges, classifications, rules, or regulations of a controlled 

carrier may not, without special permission of the Commission, become effective sooner than 

the 30th day after the date of publication. The Commission’s staff monitors U.S. and foreign 

trade press and other information sources to identify controlled carriers and any unjust or 

unreasonable controlled carrier activity that might require Commission action. As of the end 

of fiscal year 2020, four controlled carriers operated in the U.S. trades. All four controlled 

carriers are subsidiaries of COSCO SHIPPING Holdings Co., Ltd.: 

1. COSCO SHIPPING Lines Co., Ltd. – People’s Republic of China; 

2. Orient Overseas Container Line Limited – People’s Republic of China; 

3. OOCL (Europe) Limited – People’s Republic of China; and 

4. COSCO Shipping Lines (Europe) GmbH – People’s Republic of China. 
58 59th Annual Report
59th Annual Report 59

Formal Investigations, Private 

Complaints and Litigation

Adjudicative proceedings before the Commission are commenced by the filing of a complaint, 

or by order of the Commission upon petition, or upon its own motion. Types of docketed 

proceedings include:

• Private complaints: Any person may file a formal complaint alleging violations of specific 

sections of the Shipping Act found at 46 U.S.C. Chapter 411. Formal complaints are 

generally assigned to an Administrative Law Judge (ALJ) who issues an initial decision 

which is reviewed by the Commission.

• Small claims complaints: For claims of $50,000 or less, an informal complaint may be 

filed. The complaint is handled by a settlement officer for resolution using informal 

procedures that do not tend to include discovery or motions practice.

• Investigative proceedings: The Commission may investigate the activities of ocean 

common carriers, OTIs, MTOs, and other persons to ensure effective compliance with 

the statutes and regulations administered by the Commission. Formal orders of investigation and hearing are assigned to an ALJ for an initial decision and may be reviewed 

by the Commission.

The following summarizes the results of docketed proceedings concluded during FY 2020 

by the OALJ and the Commission:

Formal Proceedings

Ngobros and Company Nigeria 

Limited v. Oceane Cargo Link, LLC 

[Docket No. 14-15]

Complainant alleges that Respondents 

violated the Shipping Act in transporting 

three vehicles from Georgia to West Africa. 

The ALJ found that Respondents violated 46 

U.S.C. § 41102(c) and awarded Complainant 

reparations. The Commission determined to 

review the ALJ decision, but, while review 

was underway, one of the Respondents filed 

for bankruptcy. Because of the bankruptcy, 

the Commission stayed the proceeding. In 

October 2017, the Commission learned that 

the Respondent had received a Chapter 7 

bankruptcy discharge, and the stay was 

lifted. Meanwhile, the same Respondent was 

indicted and later plead guilty to fraud and 

identity theft in federal court. In December 

2019, the Commission vacated and remanded 

in part the ALJ decision. Complainant then 

requested voluntary dismissal of the complaint. The ALJ granted the request, and the 

dismissal became administratively final in 

March 2020. 
60 59th Annual Report

In Re: Vehicle Carrier Services [Docket 

Nos. 16-01, 16-07, 16-10, 16-11]

Complainants in these four consolidated 

cases allege that Respondents violated multiple provisions of the Shipping Act for nearly 

two decades by secretly agreeing and conspiring to fix, raise, and stabilize prices and 

allocate customers and market share in the roll 

on/roll off (RoRo) shipping trade. Complainants shipped or purchased new assembled 

cars and trucks transported on Respondents’ 

RoRo ships and allege that Respondents’ 

illegally inflated charges were passed along 

to them, either directly as freight charges or 

indirectly in the purchase prices of vehicles. 

Complainants sued on their own behalf and 

on behalf of similarly-situated members of 

a class. The ALJ dismissed Complainants’ 

claims as time-barred and for lack of standing 

and also provisionally ruled that the Commission lacked authority to adjudicate class 

actions. Complainants appealed. In October 

2019, the Commission affirmed the ALJ’s dismissal of the indirect purchaser complaints for 

lack of standing under the direct purchaser 

rule; affirmed the ALJ’s dismissal of the direct 

purchaser complaint as to reparations as 

untimely; and reversed the ALJ insofar as the 

ALJ allowed the direct purchasers to pursue 

cease-and-desist relief. 

Hangzhou Qianwang Dress Co., Ltd. 

v. RDD Freight International Inc. 

[Docket No. 17-02]

Complainant alleges that Respondent violated the Shipping Act by releasing goods to 

a consignee before it had received the original 

bills of lading or permission to release from 

Complainant. The ALJ found that Respondent released cargo without the original bill 

of lading in violation of 46 U.S.C. § 41102(c) 

and awarded Complainant reparations. The 

Commission vacated the ALJ decision and 

remanded the case so that the ALJ could determine whether Respondent’s acts or omissions 

occurred on a normal, customary, and continuous basis. On remand, the ALJ found that 

Complainant had not established a § 41102(c) 

violation and dismissed the complaint. The 

Commission affirmed the ALJ’s decision in 

September 2020. 

Port Elizabeth Terminal & Warehouse 

Corp. v. Port Authority of New York & 

New Jersey [Docket No. 17-07]

Complainant alleges that Respondent 

decided to lease property occupied by Complainant at Port Newark to another tenant, 

while at the same time declining to lease 

additional property to Complainant, in 

violation of 46 U.S.C. §§ 41102(c), 41106(2), 

41106(3), 41104(a)(8), and 41104(a)(9). The 

ALJ dismissed two of the claims and found 

that Complainant was barred from seeking 

reparations for the surviving claims under 

the Shipping Act’s statute of limitations. Complainant appealed the ALJ’s decision. While 

the appeal was pending, the ALJ in March 

2019 dismissed the remaining claims on the 

merits. Complainant filed exceptions to that 

decision as well. In December 2019, the Commission approved the parties’ settlement and 

dismissed the case. 

Marine Transport Logistics, Inc. v. 

CMA-CGM (America) LLC [Docket 

No. 18-07]

Complainant filed a complaint alleging 

violations of the Shipping Act including that 

Respondent violated 46 U.S.C. §§ 41102(c), 
59th Annual Report 61

41104(9), and 41104(10), connected with the 

shipment of and failure to deliver nine containers to Yemen. Respondent filed its answer, 

denying the allegations and raising affirmative defenses. The parties were granted a 

stay while they pursued a settlement. When 

the proceeding did not resolve, Respondent 

filed a motion to dismiss. Complainant filed 

an opposition to the motion to dismiss and a 

cross-motion for leave to file an amended complaint. The ALJ issued an order granting the 

amended complaint and denying the motion 

to dismiss. The parties filed a joint petition 

for approval of settlement. On February 18, 

2020, the ALJ issued an order approving the 

confidential settlement and dismissing the 

proceeding with prejudice.

Logfret, Inc. v. Kirsha, B.V. [Docket 

No. 18-10]

Complainant alleges that Respondents 

committed numerous unethical and illegal 

activities related to the management and 

governance of Complainant’s Dutch affiliate in violation of 46 U.S.C. § 41103(a), such 

as improper leasing decisions and sharing 

company-sensitive information with competitors. The ALJ dismissed the complaint, 

and Respondents subsequently petitioned for 

attorney fees. The ALJ denied the petition. 

Respondents filed exceptions to the decision 

denying their petition, but in June 2020, the 

Commission affirmed the ALJ. 

Muhammad Rana v. Michelle Franklin, D.B.A. “The Right Move” Inc. 

[Docket No. 19-03]

Complainant filed a complaint alleging violations of the Shipping Act for failure to pay 

shipping fees for a shipment of household 

goods from the United States to Pakistan. 

Respondent admitted that she failed to pay 

the ocean shipping charges, blaming problems with prior shipments, but disputed that 

the failure was willful, that she violated the 

Shipping Act, and the request for damages. 

Complainant withdrew the claim of a violation of § 41102(c). The ALJ issued an initial 

decision finding that Respondent violated 

§ 41102(a) of the Shipping Act by utilizing 

unjust or unfair means to obtain ocean transportation at less than the rates that otherwise 

would be applicable and imposing reparations in the amount of $7,472.40 with interest. 

Respondent appealed and this proceeding is 

currently pending before the Commission.

Possible Revocation of Passenger 

Vessel Operator Performance Certificate No. P1397 Great Northern & 

Southern Navigation Co., LLC dba 

French America Line [Docket 19-08]

On April 10, 2019, the Commission’s Bureau 

of Certification and Licensing notified Great 

Northern & Southern Navigation Co., LLC dba 

French America Line (FAL) that it intended to 

revoke Respondent’s Certificate of Financial 

Responsibility for Indemnification of Passengers for Nonperformance of Transportation 

(Certificate). On October 31, 2019, the Commission issued an order granting a hearing 

and directing FAL to Show Cause why its Certificate should not be revoked. The Bureau 

of Enforcement submitted its Memorandum 

of Law and Exhibits responding to FAL’s 

submissions. On March 20, 2020, the Commission revoked the Certificate (Performance) 

of Great Northern & Southern Navigation Co., 

LLC, prohibiting it from offering, advertising, or conducting passenger vessel cruises. 
62 59th Annual Report

The Commission found FAL to have failed to 

respond to lawful inquiries, requests for information, provided willfully false information 

in connection with an application for a Certificate (Performance), and failed to maintain 

its qualification as financially responsible.

VerTerra Ltd. v. D.B. Group America 

Ltd. and D.B. Group India Ltd. [Docket 

No. 19-09]

Complainant filed a complaint alleging 

violations of the Shipping Act, including 46 

U.S.C. §§ 41104, 41104(a), 41104(a)(2), 41104(a)

(3), 41104(a)(4), 41104(a)(5), 40501, and 40502. 

Complainant alleges that Respondents committed the violations when Respondents 

coordinated approximately 293 discreet shipping jobs for Complainant from May 2016 

through December 2018. Respondents filed a 

timely motion to dismiss the proceeding. The 

ALJ issued an order denying Respondents’ 

motion to dismiss or stay the proceedings. 

Respondents filed their answer, denying 

any violation of the Shipping Act and raising affirmative defenses. The parties filed a 

joint petition for approval of settlement and 

request for confidential treatment. The ALJ 

issued an initial decision approving the confidential settlement agreement and dismissing 

the proceeding. The decision became administratively final on July 14, 2020. 

Earlean Edwards Dukart v. Ocean Star 

International Inc., d/b/a International 

Van Lines [Docket No. 20-03]

Complainant alleges that Respondent violated 46 U.S.C §§ 41102(a),(b),(c); 41103(a); 

41104(a)(1), (2)(A), (3), (4)(A), (4)(D), (4)(E), 

(5), (8), (10); and 41105(1), (2), (4) of the Shipping Act in connection with a dispute over 

a contract to ship household goods from the 

United States to Belize. Respondent denied the 

allegations, asserting that the shipment was 

not an overseas shipment handled by their 

company, and asked that the complaint be 

dismissed. The ALJ issued an initial decision 

granting Complainant’s request for voluntary 

dismissal without prejudice. On August 11, 

2020, the decision became administratively 

final.

Dip Shipping Company, LLC Revocation of Ocean Transportation 

Intermediary License No. 018752 

[Docket 20-04]

On February 19, 2020, the Commission’s 

Bureau of Certification and Licensing (BCL) 

issued a Notice of Intent to Revoke the OTI 

license of Dip Shipping Company based on 

the guilty plea by Dip Shipping of fixing 

OTI prices in violation of the Sherman Act. 

Dip Shipping requested, and was granted, 

a hearing that was conducted pursuant to 

the Commission’s regulations governing 

revocations of OTI licenses. The Bureau of 

Enforcement submitted supporting materials 

upon which BCL relied in issuing the Notice 

of Intent, as well as its brief in reply to Dip 

Shipping’s response to the Notice. The Administrative Law Judge issued a decision on July 

29, 2020 finding that the evidence supported 

a finding that Dip Shipping’s conviction of 

conspiracy to fix OTI prices in violation of 

the Sherman Act supported revocation of Dip 

Shipping’s OTI license. The decision became 

administratively final on August 31, 2020.
59th Annual Report 63

Zero Waste Challenge, LLC v. Worldwide Freight Services, Inc. d/b/a 

United American Line [Docket No. 

20-08]

Complainant filed a complaint alleging that Respondent violated 46 U.S.C. § 

41102(c) of the Shipping Act in connection 

with 58 containers being shipped from the 

United States to Pakistan. The parties filed 

a joint motion requesting an extension of 

time to file a responsive pleading. The ALJ 

granted the extension. The Complainant then 

filed a request for voluntary dismissal of the 

complaint. The Secretary issued a notice of 

voluntary dismissal.

MAC Industries, Inc. d/b/a MAC Container Line v. COSCO SHIPPING 

Lines Co., Ltd. [Docket No. 20-09]

 Complainant filed a complaint alleging 

violations of the Shipping Act, including that 

Respondent violated 46 U.S.C. § 41104(3) by 

denying Complainant access to shipping rates 

normally available to volume shippers. On 

July 10, 2020, the parties filed a joint petition requesting approval of a settlement and 

attached a copy of the confidential settlement 

agreement. The ALJ issued an initial decision 

approving the confidential settlement agreement and dismissing the proceeding. The 

decision became administratively final on 

August 31, 2020.

Aeneas Exporting LLC v. Carlo Shipping International, Inc. [Docket No. 

20-11]

 Complainant filed a complaint alleging 

violations of the Shipping Act, including that 

Respondent violated 46 U.S.C. §§ 41102(c) and 

41104(a)(3), and seeking damages accrued 

due to an increase in shipping rates and subsequent detention of 24 of Complainant’s 

shipping containers in Benghazi, Libya. Complainant filed a request for dismissal pursuant 

to settlement. The ALJ issued an initial decision approving the settlement agreement and 

dismissing the proceeding. At the end of the 

fiscal year, the Commission had not determined whether or not to review the decision.

M/S Parsons Overseas v. Seven Seas 

Shipping USA, Inc. [Docket No. 

1960(I)]

Claimant initiated an informal proceeding 

alleging that Respondent violated the Shipping Act by creating false bills of lading and 

releasing Claimant’s shipment to an unauthorized party without obtaining the genuine 

bill of lading. The Small Claims Officer (SCO) 

found in favor of the Claimant and awarded 

reparations. The Commission vacated the SCO 

decision and remanded the case so that the 

SCO determine whether Respondent’s acts or 

omissions occurred on a “normal, customary, 

and continuous basis.” On remand, the SCO 

found that Claimant had not proved a violation of § 41102(c) and dismissed the claim. 

In December 2019, the Commission vacated 

the SCO decision dismissing the claim and 

remanded to give Claimant an opportunity to 

seek discovery regarding whether Respondent 

engaged in unjust and unreasonable conduct 

with respect to other shipments or shippers. 

Claimant then moved to withdraw the complaint and dismiss the proceeding, and the 

SCO granted the request in February 2020. The 

decision to dismiss became administratively 

final on March 30, 2020.
64 59th Annual Report

Rulemakings

The Commission initiated several rulemakings during the fiscal year to update its 

regulations and reduce regulatory burdens.

Licensing, Registration and Financial Responsibility Requirements for 

Ocean Transportation Intermediaries 

[Docket No. 18-11] 

The Commission proposed minor changes 

to the requirements for OTIs in a Notice of Proposed Rulemaking published on December 17, 

2018. The proposed changes involved minor 

adjustments to the application and renewal 

procedures for licenses and registrations, such 

as changes to the form, type, and timing of 

information required to be submitted to the 

Commission. The Commission issued a final 

rule on November 15, 2019, adopting all but 

one of the proposed changes.

Hearing Procedures Governing the 

Denial, Revocation, or Suspension of 

an OTI License [Docket No. 19-04]

The Commission issued a final rule on 

January 31, 2020, modifying the hearing procedures governing the denial, revocation, 

or suspension of an OTI license found in 46 

C.F.R. § 515.17. The Commission previously 

issued a Notice of Proposed Rulemaking on 

September 3, 2019 and received no comments. 

The revised hearing procedures align more 

closely with other Commission proceedings, 

ensure a more streamlined process, and fulfill the need for more detailed procedural 

requirements.

Interpretive Rule on Demurrage and 

Detention under the Shipping Act 

[Docket No. 19-05]

In March 2018, based in part on Petition No. 

P4-16 filed by a group of importers, exporters, 

freight forwarders, and truckers, the Commission initiated Fact Finding Investigation No. 28 

to investigate port demurrage, detention, and 

free time practices. Commissioner Rebecca 

F. Dye was appointed the Fact Finding Officer. After an almost 18-month investigation, 

Commissioner Dye recommended that the 

Commission: (1) issue an interpretive rule 

clarifying how the Commission will assess the 

reasonableness of detention and demurrage 

practices; (2) establish a Shipper Advisory 

Board; and (3) continue to support the Supply 

Chain Innovation Team working to address 

chassis availability issues in Memphis, TN. 

The Commission approved the recommendations and issued a proposed interpretive rule 

on detention and demurrage in September 

2019. The Commission received over one hundred comments on the proposed interpretive 

rule, and, on May 18, 2020, the Commission 

published a final rule setting forth guidance 

on how the Commission will determine the 

reasonableness of demurrage and detention 

practices under 46 U.S.C. § 41102(c).

Regulatory Amendments Implementing the Frank LoBiondo Coast Guard 

Authorization Act of 2018 [Docket No. 

19-06]

The Commission issued a notice of proposed rulemaking on October 9, 2019, 

proposing to revise its regulations to reflect 
59th Annual Report 65

the statutory changes in the Frank LoBiondo 

Coast Guard Authorization Act of 2018, Public 

Law 115-282 (LoBiondo Act). The Commission published a final rule on February 20, 

2020. The more significant changes adopted 

by the final rule included: (1) revising the 

regulations governing Commission meetings 

to include provisions on “nonpublic collaborative discussions,” a new type of meeting 

established by the LoBiondo Act that is not 

open to public observation; (2) revising the 

regulations governing OTI licensing and 

financial responsibility to reflect changes to 

the types of activities that require a license; 

and (3) revising the regulations to reflect the 

statutory change making confidential any 

comments on filed ocean common carrier and 

MTO agreements.

Delegations to Bureau of Enforcement 

and Enforcement Procedures [Docket 

No. 19-07]

The Commission published a direct final 

rule on October 9, 2019, revising its enforcement procedures. The revised procedures 

include: (1) providing notice to the subjects 

of Bureau of Enforcement investigations and 

allowing them an opportunity to respond; (2) 

requiring Commission approval before formal 

or informal enforcement action is undertaken; 

and (3) requiring Commission approval of 

any proposed compromise agreements. The 

rule mirrors the U.S. Securities and Exchange 

Commission’s Wells process.

Petition of the World Shipping Council for an Exemption and Rulemaking 

[Petition P3-18] / Service Contract 

Rulemaking [Docket No. 20-02]

The World Shipping Council (WSC), a trade 

association of ocean common carriers, petitioned the Commission for an exemption from 

the service contract filing and essential terms 

publication requirements set forth at 46 U.S.C. 

§ 40502(b) and (d), and further petitioned for 

the initiation of a rulemaking proceeding to 

amend the Commission’s service contract 

regulations in 46 C.F.R. part 530 consistent 

with the requested exemption. 

On December 20, 2019, the Commission 

issued an order denying in part and granting 

in part the petition. Specifically, the Commission denied WSC’s request for an exemption 

from the requirement in 46 U.S.C. § 40502(b) 

that ocean common carriers file service contracts with the Commission. In contrast, the 

Commission granted WSC's request for an 

exemption from the requirement in § 40502(d) 

that carriers publish essential terms with each 

service contract, determining that an exemption from § 40502(d) would not result in a 

substantial reduction in competition or be 

detrimental to commerce. The Commission 

also determined to initiate a rulemaking to 

implement the essential terms publication 

exemption.

After publishing a notice of proposed rulemaking on February 14, 2020, and reviewing 

the comments received, the Commission published a final rule on June 25, 2020, eliminating 

the essential terms requirements in the Commission’s regulations. 
66 59th Annual Report

Temporary Exemption from Certain Service Contract Requirements 

[Docket No. 20-06]

Responding to the impact of COVID-19 on 

commercial shipping operations, the Commission issued an order on April 27, 2020, 

temporarily exempting carriers from the 

requirement that service contracts be filed 

with the Commission before becoming effective, so long as carriers file the contracts within 

30 days of the effective date. 

Policy Statement on Passenger Vessel 

Financial Responsibility [Docket No. 

20-13]

On April 30, 2020, the Commission initiated 

Fact Finding 30 to investigate COVID-19’s 

impact on the cruise industry. Based on information gathered as part of the Fact Finding, 

the Commission issued a policy statement on 

August 14, 2020, determining that COVID-19’s 

unprecedented effects on the cruise industry 

constituted good cause under Commission 

regulations to consider alternative forms of 

financial protection using a shorter period 

of time to determine the required amount 

of coverage. The Commission’s goal is to 

help mitigate the commercial impact of the 

COVID-19 pandemic on the cruise industry 

by eliminating unnecessary compliance costs. 

The Commission determined to maintain the 

policy as long as COVID-19’s negative effects 

on the cruise industry continue.

Passenger Vessel Financial Responsibility [Docket No. 20-15]

On April 30, 2020, the Commission initiated 

Fact Finding 30 to investigate COVID-19’s 

impact on the cruise industry. As part of the 

investigation, the Fact-Finding Officer issued 

an interim report on passenger vessel operator (PVO) refund policies on July 27, 2020. 

The Fact-Finding Officer concluded that 

clearer guidance is needed in determining 

whether a passenger is entitled to obtain a 

refund if a PVO cancels a voyage, makes a 

significant schedule change, or significantly 

delays a voyage. The Fact-Finding Officer proposed that the Commission provide a clear 

interpretation of when nonperformance of 

transportation has occurred and modify the 

appropriate provisions of the Commission’s 

PVO regulations to make clear how passengers 

may obtain refunds under the PVOs’ financial responsibility instruments filed with the 

Commission. The Commission subsequently 

approved the recommendation on August 

10, 2020 and voted to initiate a rulemaking to 

implement the proposed regulatory changes.
59th Annual Report 67

Leveraging Technology

The Commission continues to leverage 

technology advances to update its business 

functions and migrate away from older technology to cloud-based enterprise systems. The 

FMC’s automated information technology (IT) 

systems are used by the shipping public to file 

license applications, carrier and MTO agreements, and commercially sensitive operational 

data used by the Commission’s economists 

to conduct mission-critical competition 

analysis. Planned information system infrastructure and architecture investments across 

all agency tasks and processes will streamline 

the Commission’s core workflow and business 

functions to maximize productivity, expand 

research and analysis capabilities, and provide 

better public access to FMC information. 

During FY 2020, the FMC’s multiyear initiative to turn on-premise line of business 

applications into cloud based enterprise 

applications and implementation of security features to strengthen the Commission’s 

security posture allowed the Commission to 

transition seamlessly to maximum telework 

work necessitated by the unprecedented 

COVID-19 pandemic. At the beginning of the 

pandemic in March 2020, all staff were able 

to work remotely with Commission-issued 

laptop computers and fully access the FMC’s 

network. Moreover, many documents previously maintained in hard copy only were 

available online as a result of the FMC’s 

investment in electronic recordkeeping. 

The FMC’s IT management and modernization efforts are guided by its Information 

Technology Strategic Plan for FY 2018-2022 (IT 

Strategic Plan), finalized in December 2018. 

This 5-year Plan reflects the FMC’s progress with prior year initiatives; next steps 

for improving IT services and solutions; and 

guides the FMC’s IT mission setting performance goals, objectives, and timelines. The 

IT Strategic Plan is aligned with the Commission’s agency-wide Strategic Plan for FY 

2018-2022 and outlines how technology will 

be used to meet the Commission’s mid-term 

strategy and long-term mission goals and 

objectives.

The FMC has identified four strategic goals 

in its IT Strategic Plan that target quality, efficiency, cybersecurity, and compliance, with 

action-oriented objectives supported by key 

initiatives. The four IT strategic goals are:

IT Strategic Goal 1 – Manage and deliver 

quality IT systems and services critical for the 

FMC to fulfill its mission and support related 

administrative, business, and operational 

functions.

IT Strategic Goal 2 – Maintain IT policies, procedures, and practices that support 

efficient and effective FMC business, administrative, and mission processes. 

IT Strategic Goal 3 – Expand on current 

progress to strengthen the security posture 

of FMC’s networks and systems.

IT Strategic Goal 4 – Ensure reliability and 

accuracy of federal information technology 

as required by statutes, government-wide 

requirements, directives, or guidance. 

At the enterprise level, IT capital planning 

and investment control (CPIC) is informed 

through engagement with the FMC’s Information Technology Advisory Board (ITAB). The 

ITAB is responsible for reviewing IT planning 
68 59th Annual Report

and the budget appropriate to support IT 

application development, business continuity 

and disaster recovery, information assurance 

and cybersecurity, data management and user 

support, as well as network and telecommunications systems maintenance. 

The Commission continued progress on 

several key initiatives in 2020. The FMC 

finalized development of its Ebonds system, 

moving from a paper-based process into a 

cloud-based application that will be a part of 

OTIS, an enterprise cloud-based application. 

The Commission implemented security features and updates to strengthen the security 

posture, to include fully implementing continuous diagnostic and monitoring (CDM).
59th Annual Report 69
70 59th Annual Report
59th Annual Report 71

APPENDICES

A – FMC Organization Chart
72 59th Annual Report

B – FMC Senior Officials – FY 2020

Chief of Staff Mary T. Hoang

Counsel to Chairman Khouri John A. Moran

Counsel to Commissioner Dye Robert M. Blair***

Counsel to Commissioner Maffei Katharine Primosch

Counsel to Commissioner Sola Cory Cinque***, Clark Jennings

Counsel to Commissioner Bentzel John Young

General Counsel Tyler J. Wood*, William Shakely**, 

 Steven Andersen

Secretary Rachel E. Dickon

Chief Administrative Law Judge Erin Wirth

Director, Office of EEO Ebony Jarrett

Inspector General Jon Hatfield

Managing Director Karen V. Gregory

Deputy Managing Director Peter King

Director, Bureau of Trade Analysis Florence A. Carr 

Director, Bureau of Certification and Licensing Sandra L. Kusumoto*, 

Clifford Johnson**, Cindy Hennigan

Director (Deputy), Bureau of Enforcement Benjamin K. Trogdon

Director, Office of CADRS Rebecca A. Fenneman*, 

 Zoraya de la Cruz**, Philip Lee **

*Departed, **Acting, ***Interim Counsel
59th Annual Report 73

C – Statement of Appropriations, Obligations, 

and Receipts

Statement of Appropriations - Public Law 116-94:

For necessary expenses of the Federal Maritime Commission as authorized by § 201(d) of 

the Merchant Marine Act, 1936, as amended (46 U.S.C. § 307), including services as authorized 

by 5 U.S.C. § 3109; hire of passenger motor vehicles as authorized by 31 U.S.C. § 1343(b); and 

uniforms or allowances therefore, as authorized by 5 U.S.C. § 5901-5902, $28,000,000: Provided, 

that not to exceed $2,000 shall be available for official reception and representation expenses.

Statement of Custodial Activity:

2020 2019

Fines, Penalties, and Forfeitures $103 $660,125

General Fund Proprietary Receipes (User fees) 190,950 233,770

Refunds of Proprietary Receipts (User fees) (2,375) (2,747)

Interest 15 19

Total Custodial Collections $188,693 $891,166

Financial Operations: For a detailed review of the FMC’s financial operations, including 

expenditures, please refer to the FMC’s Congressional Budget Reports and its Performance and Accountability Reports found at https://www.fmc.gov/about-the-fmc/

strategies-budgets-and-performance/.
74 59th Annual Report

D – Agreement Types

Types of Agreements

First introduced with the current eAgreements system in FY 2016, the Commission categorizes ocean common carrier agreements by the types of agreements currently utilized by 

the ocean transportation industry, recognizing trends among types of agreement filings, and 

provided more refined information to users. The current categories are summarized below. 

Space charter agreements authorize an ocean common carrier(s) to sell or exchange vessel 

space for use by another shipping line. Space charter agreements do not include the authority 

to discuss the provision of space in a trade, only the chartering of space already deployed. 

Vessel sharing agreements authorize two or more shipping lines to discuss and agree on 

the supply of vessel capacity in a defined U.S. trade through the deployment of a specific 

service string or strings. 

Global vessel sharing agreements/alliances authorize two or more shipping lines to discuss and agree on the supply of vessel capacity across multiple trades. Alliance agreements 

may contain other authorities such as, information exchange, joint procurement of goods or 

services necessary to operate their services, etc. While there are currently seven global alliance agreements on file with the Commission, only three are jointly/collectively operating 

container services in the U.S. trades. 

Vessel-operating common carrier (VOCC) conference agreements are distinguished from 

all other types of agreements because they authorize two or more shipping lines to collectively 

discuss, agree, and fix uniform freight rates, charges, practices, and conditions of service 

relating to the receipt, carriage, handling and/or delivery of passengers or cargo. There are 

currently no conference agreements on file that cover the movement of general commercial 

cargo. The conference agreements currently on file with the Commission only involve the 

transport of government impelled cargo. 

Joint service agreements authorize two or more shipping lines to establish and operate a 

combined vessel service or joint venture that uses a distinct operating name and generally 

acts as a single shipping line independent of the shipping lines that are parties to the joint 

service agreement. 

Equipment discussion agreements are agreements between shipping lines that primarily 

focus on the discussion, exchange, and transportation of containers, chassis, LASH/ SEABEE 

barges, and related equipment.

VOCC rate discussion agreements focus on any type of rate matter or charges, but unlike 

conferences, any consensus on rates among the shipping line members is non-binding on the 

members.

VOCC cooperative working agreements (CWAs) authorize shipping lines to establish 

exclusive, preferential, or cooperative working relationships that are subject to the Shipping 
59th Annual Report 75

Act, but that do not fall precisely within the parameters of any other specifically defined 

agreement category. 

Assessment agreements, whether part of a collective bargaining agreement or negotiated 

separately, authorize the parties to collectively bargain for fringe benefit obligations on other 

than a uniform man-hour basis regardless of the cargo handled or type of vessel or equipment utilized. These agreements can be between common carriers and labor organizations, 

or marine terminal operators and labor organizations, and are effective upon filing with the 

Commission.

Marine terminal rate discussion agreements authorize marine terminal operators to discuss 

rates and/or charges related to marine terminal operations.

Marine terminal facilities agreements generally refer to lease agreements between a marine 

terminal operator and the owner of the land or warehouse/facility at a port.

Marine terminal services agreements are agreements between a marine terminal operator 

and a shipping line concerning marine terminal services provided to and paid for by a shipping 

line. These services include: dockage, free time, handling, heavy lift, loading and unloading, 

terminal storage, usage, wharfage, wharf demurrage, and checking (the service of counting 

and checking cargo against the shipping documentation), and including any marine terminal 

facilities that may be provided incidentally to such marine terminal services. 

Marine terminal joint venture agreements are agreements between or among two or more 

marine terminal operators, or between one or more marine terminal operators and one or 

more shipping lines, operating as a joint venture whereby a separate marine terminal operator is established. 

MTO cooperative working agreements authorize marine terminal operators to establish 

exclusive, preferential, or cooperative working relationships subject to the Shipping Act, but 

do not fall precisely within the parameters of any of the above specifically defined agreement 

categories
76 59th Annual Report

E – Agreement Review Standard 

Statutory Standard and Process for Commission Review of Agreements Between or Among Ocean Common Carriers or Marine Terminal 

Operators

Review of agreements is governed by 46 U.S.C. 41307(b), also commonly referred to as 

Section 6(g) of the Shipping Act.

The Commission’s process for review of agreements is established in 46 U.S.C. 

40301 – 40303:

• Agreements becomes effective 45 days after filing unless the Commission has requested 

additional information to evaluate the competitive impact of the agreement. All agreements are reviewed pursuant to the standard set forth in section 6(g) of the Shipping 

Act, 46 U.S.C. § 41307(b)(1). 

• The Commission has the authority to reject a pending agreement filing if it determines the filing fails to meet the Shipping Act and Commission regulations requiring 

filed agreements to be clear and definite, or if the filing is outside the Commission’s 

jurisdiction. 

• The Commission may seek to enjoin the operations of an agreement under 46 U.S.C. 

§ 41307(b), where it determines that the agreement could reduce competition to the 

point of unreasonably impacting the market, or substantially lessen competition in 

the purchasing of certain covered services as defined in the Frank LoBiondo Coast 

Guard Authorization Act of 2018 (Pub. L. No 115-282). 

• Effective agreements are exempt from U.S. antitrust laws, and instead, are subject to 

Shipping Act restrictions and Commission oversight.

46 U.S.C. 41307 – Injunctive relief sought by the Commission

(b) REDUCTION IN COMPETITION. —

(1) ACTION BY COMMISSION.—

If, at any time after the filing or effective date of an agreement under chapter 403 of 

this title, the Commission determines that the agreement is likely, by a reduction in 

competition, to produce an unreasonable reduction in transportation service or an 

unreasonable increase in transportation cost or to substantially lessen competition in 

the purchasing of certain covered services, the Commission, after notice to the person 

filing the agreement, may bring a civil action in the United States District Court for 

the District of Columbia to enjoin the operation of the agreement. The Commission’s 
59th Annual Report 77

sole remedy with respect to an agreement likely to have such an effect is an action 

under this subsection.

(2) REMEDIES BY COURT.—In an action under this subsection, the court may issue—

(A) a temporary restraining order or a preliminary injunction; and

(B) a permanent injunction after a showing that the agreement is likely to have the 

effect described in paragraph (1).

(3) BURDEN OF PROOF AND THIRD PARTIES.—

In an action under this subsection, the burden of proof is on the Commission. The 

court may not allow a third party to intervene.

(4) COMPETITION FACTORS.—

In making a determination under this subsection regarding whether an agreement 

is likely to substantially lessen competition in the purchasing of certain covered 

services, the Commission may consider any relevant competition factors in affected 

markets, including, without limitation, the competitive effect of agreements other 

than the agreement under review.
78 59th Annual Report

F – Standard for Practices in Handling 

Property

46 U.S.C. 41102(c), commonly referred to as Section 10(d)(1) of the Shipping Act

(c) PRACTICES IN HANDLING PROPERTY.—

A common carrier, marine terminal operator, or ocean transportation intermediary 

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 Commission has recently published interpretive rules regarding 46 U.S.C. 41102(c) 

to clarify the scope of the prohibition, and provide guidance about its interpretation in the 

context of detention and demurrage charges. 

46 C.F.R. §545.4 Interpretation of Shipping Act of 1984—Unjust and unreasonable practices.

46 U.S.C. 41102(c) is interpreted to require the following elements in order to establish a 

successful claim for reparations:

(a) The respondent is an ocean common carrier, marine terminal operator, or ocean transportation intermediary;

(b) The claimed acts or omissions of the regulated entity are occurring on a normal, customary, 

and continuous basis;

(c) The practice or regulation relates to or is connected with receiving, handling, storing, 

or delivering property;

(d) The practice or regulation is unjust or unreasonable; and

(e) The practice or regulation is the proximate cause of the claimed loss.

46 C.F.R. §545.5 Interpretation of Shipping Act of 1984—Unjust and unreasonable practices with respect to demurrage and detention.

(a) Purpose. The purpose of this rule is to provide guidance about how the Commission 

will interpret 46 U.S.C. 41102(c) and §545.4(d) in the context of demurrage and detention.

(b) Applicability and scope. This rule applies to practices and regulations relating to demurrage 

and detention for containerized cargo. For purposes of this rule, the terms demurrage and 

detention encompass any charges, including “per diem,” assessed by ocean common carriers, 

marine terminal operators, or ocean transportation intermediaries (“regulated entities”) 

related to the use of marine terminal space (e.g., land) or shipping containers, not including 

freight charges.
59th Annual Report 79

(c) Incentive principle—(1) General. In assessing the reasonableness of demurrage and 

detention practices and regulations, the Commission will consider the extent to which 

demurrage and detention are serving their intended primary purposes as financial incentives to promote freight fluidity.

(2) Particular applications of incentive principle—(i) Cargo availability. The Commission 

may consider in the reasonableness analysis the extent to which demurrage practices and 

regulations relate demurrage or free time to cargo availability for retrieval.

(ii) Empty container return. 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.

(iii) Notice of cargo availability. In assessing the reasonableness of demurrage practices 

and regulations, the Commission may consider whether and how regulated entities provide 

notice to cargo interests that cargo is available for retrieval. The Commission may consider 

the type of notice, to whom notice is provided, the format of notice, method of distribution 

of notice, the timing of notice, and the effect of the notice.

(iv) Government inspections. In assessing the reasonableness of demurrage and detention 

practices in the context of government inspections, the Commission may consider the extent 

to which demurrage and detention are serving their intended purposes and may also consider 

any extenuating circumstances.

(d) Demurrage and detention policies. The Commission may consider in the reasonableness 

analysis the existence, accessibility, content, and clarity of policies implementing demurrage 

and detention practices and regulations, including dispute resolution policies and practices 

and regulations regarding demurrage and detention billing. In assessing dispute resolution 

policies, the Commission may further consider the extent to which they contain information 

about points of contact, timeframes, and corroboration requirements.

(e) Transparent terminology. The Commission may consider in the reasonableness analysis 

the extent to which regulated entities have clearly defined the terms used in demurrage and 

detention practices and regulations, the accessibility of definitions, and the extent to which 

the definitions differ from how the terms are used in other contexts.

(f) Non-Preclusion. Nothing in this rule precludes the Commission from considering factors, 

arguments, and evidence in addition to those specifically listed in this rule.
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