FMC monitoring Strait of Hormuz surcharges

Commission regulations at 46 CFR 520.8(a)(1&2) require common carriers to provide at least 30 days between the publication and effective date of a change to a tariff that results in an increased cost to shippers. 46 CFR 520.14(c) outlines a process through which a common carrier may submit a Special Permission (SP) request showing good cause to reduce this 30-day waiting period. The Commission reviews and votes on all SP requests. If an SP is granted, the approval will show the effective date permitted for the charge. Per 46 CFR 520.7(c), a tariff rate, charge, or rule must be in effect at the time the carrier or its agent receives cargo.     The Commission maintains a list of all common carrier tariff locations for Vessel-Operating Common Carrier and Non-Vessel-Operating Common Carrier.

Shippers are encouraged to access and review their common carrier’s tariff. Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner, and for compliance with the Shipping Act’s statutory prohibitions against unjustly discriminatory practices, unreasonable prejudices, and unreasonable refusals to deal. Parties should be familiar with the terms of their service contract. If a service contract incorporates all or a portion of a carrier’s published tariff, then the associated rates, charges, or rules must be applied based on their effective date at the time of cargo receipt. Shippers are reminded that under the Shipping Act, filing suit in a court of law is the exclusive remedy for any alleged breach of a service contract, unless parties agree to an alternative dispute resolution forum. (46 U.S.C. § 40502(f)).

Alleging breach of a contract (i.e., a failure to comply with agreed-upon terms) is different than alleging that a common carrier might have violated the Shipping Act’s guidelines. The FMC may on complaint, or its own motion, investigate potential Shipping Act violations. Shipping Act violations, if found, may result in fines being assessed against the common carrier, or damages awarded to a shipper.

Shippers should file a complaint with the FMC or contact its office of Consumer Affairs and Dispute Resolution Services if they are concerned that a carrier is acting in a manner that does not comply with 46 CFR Part 520.