Federal Maritime Commission (FMC)

Formed as an independent means in 1961, the FMC provides alternative dispute resoluteness in cases wherein nautical terminal operators, park carriers, or early parties within the ocean transport industry have disagreements. Among the commission ’ s staff are administrative jurisprudence judges who make binding decisions in such cases.

Key Takeaways

• The Federal Maritime Commission was formally established in 1961, representing the development of shipping regulation going binding to World War I.
• The FMC is an autonomous federal means with five president-appointed commissioners.
• The mission of the FMC is to ensure a “ competitive and reliable ” ocean embark diligence that protects the U.S. public from unfair ocean department of transportation practices.

Understanding the Federal Maritime Commission

The Federal Maritime Commission is made up of five commissioners who are appointed by the president of the united states and confirmed by the U.S. Senate. The commissioners serve staggered five-year terms, which helps ensure the bipartisan nature of the consistency ; no more than three members of the commission can represent the lapp political party. The president designates one of the commissioners to serve as the means ’ second electric chair, headman administrator, and chief administrative officer .

The commission ’ mho staff is composed largely of attorneys, economists, and ocean fare experts. Most of the employees work in the means ’ mho Washington, D.C., headquarters, although the representation besides operates six other port-based locations throughout the nation .

The FMC performs several functions designed to ensure the comeliness and efficiency of ocean-based transport. These include :

• Reviewing agreements between ocean common carriers, which transport passengers or goods across international waters, and marine terminal operators (MTOs), which provide loading, unloading, and storage of items at a port
• Ensuring that such agreements do not result in unfair hikes in transportation costs or a loss of services
• Offering relief to exporters, importers, and other parties who are harmed by unreasonable ocean shipping practices
• Providing a dispute resolution process for matters concerning the shipment of cargo and for complaints between cruise vessel operators and passengers
• Seeking redress when foreign governments or business entities impose unfair business conditions on U.S. exporters
• Regulating ocean transportation intermediaries (OTIs), which don’t transport cargo or passengers, but often facilitate shipping transactions
• Ruling on disputes that involve rates, classifications, and practices of common carriers, MTOs, and OTIs
• Maintaining a fleet of U.S. liner vessels capable of responding to potential international conflicts

When the commission adjudicates disputes, the rulings are binding for all parties. however, the initial decision can be appealed by any of the parties involved in the dispute or at the request of one of the five commissioners. The FMC would then act as an appellate court, reviewing the case and issuing a final examination rule .

history of the Federal Maritime Commission

The Federal Maritime Commission was officially created in 1961, during the Kennedy administration. however, its roots go back several decades earlier—to the Shipping Act of 1916.

During World War I, the demand for american exports, and consequently transportation capacity, had grown vastly. Fearing that ocean liners were colluding to raise ship rates and reduce the quality of services during this critical period, Congress created the United States Shipping Board to protect american exporters and importers from unfair trade wind practices.

concisely after the war, Congress passed the Merchant Marine Act, which gave the U.S. Shipping Board a second mission : react to foreign embark laws and practices that put the United States at a disadvantage in international trade. By 1950, the organization evolved into the Federal Maritime Board, an agency within the Department of Commerce.

however, in 1961, President John F. Kennedy signed an executive order assigning these two primary coil tasks to discriminate organizations. The newly formed Maritime Administration, or MARAD, was charged with supporting merchant marines and managing a reserve of cargo ships in the event of future international hostilities. The Federal Maritime Commission, as an independent agency, would focus on U.S. ship activities.

The creation of an independent FMC coincided with a critical development in overseas shipping—the advent of standardize embark containers that could be transported via ocean liner, rail, or truck. That breakthrough greatly increased the efficiency of international trade, leading to a boom in ocean ship dealings.

Key Statutes

respective key pieces of legislation serve as the backbone of U.S. ocean fare police and are the basis of many FMC rulings. These laws include :

The Shipping Act of 1984

The 1984 act helped modernize existing laws in light of important developments in how cargo was transported. For example, it defined “ sign baby buggy, ” or the negotiate price of ocean liner services, as opposed to pricing based on public tariffs. The act besides eliminated the motivation for carriers to file tariffs with the committee, rather allowing them to just publish tariffs .

The Foreign Shipping Practices Act of 1988

This legislation reflected a desire to protect U.S. ocean-based carriers from unfair foreign transportation practices. It bolstered the FMC ’ s baron to investigate—and potentially inflict penalties—in cases where U.S. shippers were put at a competitive disadvantage .

The Ocean Shipping Reform Act of 1998

This amendment to the 1984 act took steps to deregulate the ocean ship diligence. Among its key components was a provision that enabled common carriers to privately negotiate rates with shippers, preferably than filing them publicly.

Ocean Shipping Reform Act of 2021

In August 2021, Rep. John Garamendi ( D-Calif ), and Rep. Dusty Johnson ( R-S.D. ) co-sponsored the first major pass of ocean ship legislation since 1998. The bill is aimed, in function, at addressing supply chain issues stemming from interruptions related to the coronavirus pandemic a well as a spike in demand for imported goods. namely, the legislation ’ mho goal is to address unfair ship practices by China and early extraneous governments .

The Ocean Shipping Reform Act of 2021 would put the load of proof on carriers, not shippers, in disputes with common carriers over unfair practices. It would give the FMC a greater function in promoting reciprocal trade wind by requiring park carriers to accept export cargo from the United States. The beak would besides allow the committee to impose extra penalties on carriers on behalf of exporters who have been harmed by their practices .

The proposed legislation has met potent resistance from the World Shipping Council ( WSC ), an constitution that represents common carriers, which argues the placard would unfairly hinder its members. “ If the government is going to step in, it must be to assure fairness for all parties, and that means that the jurisprudence must spell out responsibilities and consequences for negligence by all parties, ” the WSC said in a argument .

What Is the Mission of the Federal Maritime Commission?

The Federal Maritime Commission was established in order to ensure a “ competitive and dependable international ocean fare provide system that supports the U.S. economy and protects the public from unfair and deceptive practices. ” It carries out that goal by adjudicating disputes between coarse carriers, shippers, and other parties. The commission besides has the assurance to impose penalties when U.S. shippers face unfair practices .

Are the Federal Maritime Commission’s Rulings Binding?

Arbitration rulings made by the FMC are binding on all parties. however, the commission besides has methods of option quarrel resolution, which are nonbinding. These include offering an ombudsman service and mediation, whereby it helps the parties negotiate business and regulative matters .

Who Serves on the Federal Maritime Commission?

The Federal Maritime Commission is made up of five commissioners, who serve staggered five-year terms. The commissioners are appointed by the president but have to be confirmed by the U.S. Senate .