The Federal Maritime Commission (FMC) is an independent federal agency responsible for regulating the United States' international ocean transportation system. The FMC's mission is to ensure a competitive and reliable international ocean transportation supply system and protect American exporters and American consumers of imported goods from unfair and deceptive practices, particularly by international shipping lines. It was established in 1961 at a time when the use of intermodal shipping containers, which could be transported by ship, rail, or truck, was rapidly expanding, reducing transportation costs and boosting global trade. Although it was founded during the Kennedy Administration, the FMC can trace it roots to the United States Shipping Board, created under the Shipping Act of 1916 to ensure a stable and reliable source of international ocean transport during a time of war in Europe by discouraging shipping liner collectives from unreasonably raising rates or reducing their services.
The FMC has five Commissioners chosen by the US President and approved by the Senate. They serve five-year terms that are staggered. The Commission is politically balanced, with no more than three Commissioners from the same political party. The President appoints one Commissioner to be the Chairman, who leads the Commission and manages its operations. The Office of the Managing Director carries out the Chairman's directives, oversees and coordinates the program offices and bureaus, including the bureau of certification and licensing, the bureau of investigations, enforcement, compliance, the bureau of trade analysis, and the office of consumer affairs and dispute resolution services. The Managing Director acts as the FMC's Chief Operating Officer.
Purpose of the Federal Maritime Commission
The FMC's main functions are:
- Regulating Ocean Transportation Intermediaries: licenses US based ocean freight forwarders (who act as middlemen, arranging and managing the ocean transport of goods, on behalf of the shipper, but do not own the vessels) and non-vessel-operating common carriers (who book cargo space with actual carriers and issue their own bills of lading, acting more like a carrier). This ensures these companies' financial responsibility and adherence to fair business practices.
- Monitoring Carrier Agreements: reviews and monitors agreements among ocean common carriers and marine terminal operators to prevent anti-competitive practices that could lead to significant transportation cost increases or service reductions.
- Enforcing Tariff Regulations: ensures that common carriers' tariff rates and charges are published and available electronically to the public, promoting transparency and preventing unreasonable and discriminatory pricing. The FMC publishes tariffs of vessel operating common carriers (ocean carriers who operate the vessels transporting cargo on the high seas or the Great Lakes between a US port and a port in a foreign country) at the following website: www2.fmc.gov/FMC1Users/scripts/ExtReports.asp?tariffClass=vocc
- Dispute Resolution provides a forum for resolving disputes involving the shipment of cargo, personal or household goods, and problems between cruise vessel operators and passenger. This helps maintain the reliability and security of the U.S. supply chain and transportation system.
- Protecting U.S. Shippers: investigates and addresses practices that create unfavorable conditions for U.S. shippers in international trade, including actions against foreign governments or business practices that negatively impact U.S.-foreign shipping trades.
Importance for Non-US Shippers
Since the FMC oversees the United States' international ocean transportation system, its actions and regulations impact non-US shippers conducting trade with the United States.
Non-US shippers must be aware of FMC regulations for several reasons:
- Compliance with U.S. Laws: Non-US shippers conducting trade with the United States must follow FMC regulations to avoid penalties and legal issues. Understanding these regulations ensures smooth and lawful operations.
- Fair Competition: The FMC's oversight helps maintain a level playing field in the international ocean transportation industry. Non-US shippers benefit from fair competition and protection against anti-competitive practices.
- Dispute Resolution: Non-US shippers can use the FMC's dispute resolution services to address issues with U.S. carriers or terminal operators. This helps resolve conflicts efficiently and preserve business relationships.
- Transparency in Pricing: The FMC's tariff regulations ensure that shipping rates and charges are transparent and reasonable. Based on this published information, non-US shippers can make informed decisions about transport charges, avoiding unexpected costs.
- Market Access: By following FMC regulations, non-US shippers can gain and sustain their access to the U.S. market. Compliance with these regulations demonstrates their reliability and trustworthiness, fostering positive business relationships with U.S. partners.
For more detailed information, you can refer to the Federal Maritime Commission official website https://www.fmc.gov/
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
