Latest news with #FederalMaritimeCommission
Yahoo
21-06-2025
- Business
- Yahoo
QVC and Cornerstone File FMC Complaint Against ONE for Alleged Failure to Fulfill Contract
It's two against ONE—that is to say, two entities are pursuing legal actions against freight carrier Ocean Network Express (ONE). QVC and subsidiary Cornerstone Brands filed a complaint with the U.S. Federal Maritime Commission (FMC) against ONE on June 11. The complainants allege that ONE violated the Shipping Act of 1984 by contracting a certain amount of cargo space, then informing QVC and Cornerstone that the space was unavailable. More from Sourcing Journal Nike's Settlement With Shoe Surgeon Defines Boundaries on Sneaker Customization US Companies Take Trump Tariff Suit to Supreme Court Port of LA Ordered by Federal Judge to Clean Up Contaminated Wastewater '[ONE] engaged in a practice of providing only part of the contracted service commitment, to reserve space on its vessels for higher-priced spot market purchases, which resulted in mounting shortages,' QVC and Cornerstone alleged in the complaint. The companies state that such actions forced them to pay high spot rates to ship their goods via ocean freight in 2021 and 2022, rather than simply receiving the benefit of their pre-contracted rate with ONE. According to QVC, ONE 'carried only approximately 47.75 percent of its service commitment under the Service Contract, for a shortfall of at least 627 [forty-foot equivalent units] (FEUs)—52.25 percent less than committed.' As a result of that alleged conduct, QVC contends that it had to pay higher prices from alternative carriers at higher rates, which it states cost more than $7.7 million during the 2021-2022 shipping year. According to Cornerstone, ONE 'carried only approximately 42.4% of its service commitment under the Service Contract, for a shortfall of at least 662 FEUs—57.6% less than committed,' which allegedly saw the company paying nearly $10.5 million to ship goods overseas with another carrier. QVC and Cornerstone contend that their logistics teams repeatedly asked ONE for explanations and resolutions, which were met with hesitancy or denial from the freight company. The complaint emphasizes that ONE's alleged contract breaches took place during a time of unusually high freight prices brought on by the supply chain disruptions resulting from the COVID-19 pandemic. QVC and Cornerstone state that ONE's alleged actions negatively contributed to that price hike, while allowing its own profits to soar to record highs. '[ONE's] actions in deliberately failing to honor its service commitments and instead allocating space to the highest bidder also contributed to the inflationary spiral in container rates by artificially increasing demand, including by forcing shippers who had already negotiated service contracts into the open market to make up for shortfalls caused by [its] unjust and unreasonable practices,' they wrote in the complaint. Beyond the allegation that ONE, in the pursuit of profit, illegally gave up space that should have been assigned to QVC and Cornerstone, the companies also alleged that the freight company charged unjust demurrage and detention fees. The complaint notes that, in the 2021-2022 shipping period, Cornerstone paid $978,784 in these types of fees, while QVC paid $797,835. They argue that such charges were assigned unreasonably and unfairly. 'The charges assessed by [ONE] and paid by [QVC and Cornerstone] were assessed during periods of time in which such charges were not just or reasonable because of circumstances outside the control of complainants and its agents and service providers, such as congestion at ports, lack of appointments to pick up or return containers, and shortage of equipment such as chassis,' they wrote. Earlier in the complaint, they also note that ONE charged them premium rates after defaulting on portions of the initial contract. For QVC, those fees reportedly amounted to nearly $1.5 million, while Cornerstone paid more than $340,000. As a result of ONE's alleged conduct, QVC and Cornerstone have asked for a hearing in Washington, D.C. The companies seek 'reparations for the unlawful conduct alleged' in an amount to be determined, as well as an investigation into ONE and an order putting the company's alleged illegal conduct to an end. ONE did not return Sourcing Journal's request for comment.
Yahoo
21-03-2025
- Business
- Yahoo
Regulator vows to back US exporters fearful about Trump's shipping fees
WASHINGTON — Federal Maritime Commission Chairman Louis Sola told port executives that a priority under his tenure would be assisting U.S. exporters, but that didn't quell concerns about the effect that million-dollar port fees planned against Chinese vessel operators would have on American ports. 'Exports, particularly energy and agriculture, could be priced out and make competitors from other nations more affordable for our customers abroad,' an attendee told Sola at a legislative conference sponsored by the American Association of Port Authorities in Washington this week, after Sola gave a keynote speech. 'From your perspective, and the new administration's perspective, do you think there's a willingness to alter what has been proposed to take into account what would be the effects on exports, particularly since American exports seem to be a priority?' Sola – who emphasized he was speaking on his own behalf and not for the FMC or the Trump administration – responded that the U.S. trade representative (USTR), which is proposing the fees following an investigation into China's shipping practices, is 'very well aware' of how the fines could impact American exporters. 'And we have drawn up our concerns to [USTR] to represent everybody here in the room,' he said. 'I can say that we are definitely advocating for U.S. exporters and the U.S.-flag fleet.' Under the USTR proposal, unveiled by the Trump administration in February, ships constructed in China would face fees of up to $1.5 million per U.S. port call. Vessel operators with even one Chinese-built ship in their fleet could be charged $500,000 per call, while Chinese shipping companies like Cosco would incur $1 million per call for any vessel, regardless of its origin. The unprecedented fees aim to counter China's dominance in global shipbuilding and maritime transport but could inadvertently disrupt U.S. trade flows and supply chains. Brian Clark, executive director of the North Carolina State Ports Authority, has been told by major port customers that should USTR move ahead with the fees, carriers will consolidate their port calls to a minimum number of major ports to minimize costs, bypassing smaller ports like his. 'Not only would carriers remove midsized ports from rotations entirely, precipitating the sure demise of such ports, but larger ports would experience immense congestion leading to inefficiencies worse than what was experienced during the peak of the pandemic supply chain disruptions,' Clark wrote in comments filed on Friday with USTR. 'Without access to port alternatives like the Port of Wilmington and the Port of Morehead City, North Carolina businesses will face higher transportation costs, driven by significant increases in first- and last-mile expenses to reach major ports.' John McCown, a container shipping expert, told USTR that the fees would have more adverse consequences than tariffs, particularly on exports. 'By having the proposed fees apply to all ships whether involved with imports or exports, they will effectively be a direct tariff on exports … and the American jobs linked to those exports,' he warned. The fees have raised concern about possible effects from all parts of the U.S. supply chain, including trucking. 'The trucking industry is still in a deep recession and companies are going out of business all over the country,' wrote Mitchell Bros. Truck Line, a drayage trucking company serving the ports of Seattle and Tacoma, Washington, in comments to USTR. 'These policies would be catastrophic for our industry as a whole. We need policies that promote economic growth and promote a sense of stability. These policies would cause major disruption and create extreme economic instability.' Sola was confident, however, that the trade policies being implemented by the administration would ultimately benefit the U.S. maritime sector, and attested to President Donald Trump's focus on the sector. 'I've spoken to him on numerous occasions about shipping, and he understands the supply chain as well. We've never had a president prioritize shipping the way this one has' in the first two months of an administration, Sola told conference attendees. But he cautioned that with Trump emphasizing shipping, 'a lot of things may affect you in a bad way and may give you some concern. Don't discredit at first sight; go ahead and work through it. The president is going to use a chain saw at first and then he's going to use a scalpel. So if you have concerns on [executive orders] or proposed legislation, now's the time to be involved. 'That being said, we're also going to see an investment in the United States maritime sector that I don't think that we have seen in my lifetime, and that is really saying something.' US port charges on China vessels add to supply chain uncertainty US opening investigation into container shipping choke points June sets record for China-US containers Click for more FreightWaves articles by John Gallagher. The post Regulator vows to back US exporters fearful about Trump's shipping fees appeared first on FreightWaves.
Bloomberg
14-03-2025
- Business
- Bloomberg
US Probe of Maritime Chokepoints Sets Up Expanded Global Reach
Industries Transportation By Save The Federal Maritime Commission is investigating global maritime chokepoints to assess whether a country, ocean carrier or other maritime operator are creating conditions unfavorable for US shipping and foreign trade. 'Recent events have indicated that transit constraints at several critical points in the global shipping supply chain have led to conditions that are appropriate for the Commission to investigate,' the US agency said in a Federal Register notice published Friday.
Yahoo
20-02-2025
- Business
- Yahoo
Federal Maritime Commission dropping DEI from strategic plan
Following President Donald Trump's sweeping executive order reshaping development of the federal workforce, the Federal Maritime Commission has eliminated portions of its 2022-2026 strategic plan that focus on diversity, equity and inclusion. The FMC, which regulates U.S. international ocean transportation, announced the changes in a brief statement Wednesday. 'Pursuant to Executive Order, Ending Radical and Wasteful Government DEI Programs And Preferencing, and implementing guidance from the U.S. Office of Personnel Management ('Initial Guidance Regarding DEIA Executive Orders', January 21, 2025), the following sections of the Federal Maritime Commission's 2022-2026 Strategic Plan are no longer in effect as of January 24, 2025: Objective 2.1 (page 9) – plan for future equity review; Objective 2.3 (page 12) – plan for future equity review; Stewardship Objective (page 15) – agency commitment to the principles of diversity, equity, inclusion, and accessibility; Stewardship sub-objectives S.2.1 and S.2.2 (pages 17-18); Equity Statement (page 19). The Commission will develop and publish a revised Strategic Plan as soon as is practicable.' No other details were disclosed. Trump in January appointed incumbent Commissioner Louis Sola as chairman of the five-member bipartisan FMC, succeeding Democrat Daniel Maffei. The remaining members are Republican Rebecca Dye, who as an appointee of then-President George W. Bush is the longest-serving member, and Democrat Max Vekich. One commissioner vacancy remains to be filled following the recent departure of Carl Bentzel. Separately, Trump issued an executive order that puts all independent federal agencies under his direct supervision. While it was not specifically named in the order, it is expected that the changes if applied will include the FMC. Find more articles by Stuart Chirls East Coast port sees largest-ever boxship call In slow season, tariffs a following wind for trans-Pacific container rates Georgia port tops US ro-ro gateways WATCH: Helicopter lifts crew to safety from grounded container ship The post Federal Maritime Commission dropping DEI from strategic plan appeared first on FreightWaves.
The Hill
30-01-2025
- Politics
- The Hill
What Cruz's Panama Canal hearing actually revealed
In a telling display of diplomatic disconnect, the Senate Committee on Commerce, Science and Transportation convened Tuesday to discuss foreign influence over the Panama Canal —with glaring procedural oversights. Most notably, Ilya Marotta, the canal's deputy administrator, received an invitation mere days before the hearing — a hasty afterthought that made her attendance practically impossible. This last-minute gesture toward including Panamanian expertise underscored the hearing's fundamental flaws before it even began. Chairman Ted Cruz (R-Texas) set an assertive tone, declaring that the U.S. 'cannot turn a blind eye as Panama exploits an asset of vital commercial and military importance.' Yet as testimony unfolded, a more nuanced reality emerged that challenged the hearing's premises and highlighted the complexities of modern maritime diplomacy. When directly questioned about Chinese control over the canal, Federal Maritime Commission Chairman Louis E. Sola offered a response that seemed to contradict the hearing's underlying assumptions. 'The canal is managed by the Panama Canal Authority,' he said, stating that, on a recent trip to the canal, he saw the authority's 'commitment to maintaining the canal's efficiency and resilience.' This statement, juxtaposed against the hearing's premise, underscored the gap between political rhetoric and operational reality. Law professor Eugene Kontorovich of George Mason University, tasked with analyzing potential violations of the Torrijos-Carter Treaties, could only offer qualified responses. When pressed about whether Chinese-operated ports at Balboa and Cristóbal constitute treaty violations, he acknowledged the difficulty of drawing clear conclusions. While noting that the U.S. could theoretically cancel the treaty, he admitted there was no international legal basis for reclaiming sovereignty without military force — an option he quickly deemed inappropriate as a first resort. Democratic Federal Maritime Commissioner Daniel Maffei provided the hearing's most sobering perspective. He pointed out that Chinese companies operate ports globally, suggesting that if China's presence in Panama constitutes control, then similar arguments could be made about the Suez Canal, the Singapore Strait, the Mediterranean Sea and the English Channel. This global context raised questions about whether the hearing's focus on Panama reflected genuine strategic concerns or simply broader anxieties about declining U.S. influence. The hearing's most revealing moments came when senators acknowledged their own country's shortcomings, lamenting that American companies consistently lose bids to Chinese competitors and recognizing the damage done by leaving the ambassadorial post in Panama vacant for four critical years (2018 to 2022). This self-reflection highlighted how American policy gaps, rather than Panamanian decisions, led to the very vulnerabilities under discussion. Initial concerns about Panama's ship registry program with Iran raised alarms about national security. However, these concerns dissipated when evidence emerged that Panama had already de-flagged 53 Iranian vessels suspected of sanctions evasion — a fact that underscored Panama's cooperation with American security interests rather than threatening them. Climate change appeared as a more tangible threat than geopolitical speculation. Commissioner Sola noted that annual water losses of 1 to 2 percent could reduce canal capacity by 40 percent by 2050. Yet when Sen. Lisa Blunt Rochester (D-Del.) questioned the Canal Authority's planning for the effects of drought, shipping executive Joseph Kramek could only offer that they had done the best possible with available information. The hearing's structure itself revealed telling blind spots in the U.S. policy approach. Although focusing on Chinese influence through port operations, senators gave little attention to why American companies have become less competitive in infrastructure development. The last-minute invitation to Deputy Administrator Marotta — a key figure in the canal's operations — exemplified the perfunctory approach to Panamanian inclusion. Such cursory gestures toward diplomatic engagement stand in stark contrast to the kind of sustained partnership needed for addressing complex multinational challenges. The proceedings highlighted another crucial oversight — the remarkable success of Panama's management of the canal since its 1999 transfer. The waterway has generated billions in revenue while maintaining world-class operational standards, an achievement that received surprisingly little acknowledgment during the three-hour session. This success story stands in stark contrast to the hearing's underlying narrative of vulnerability and mismanagement. Questions about excessive fees charged to U.S. vessels, a central concern raised at the hearing's outset, found little substantiation in witness testimony. The only specific complaint involved cruise lines not receiving toll refunds for port calls — a matter governed by clear Panamanian regulations requiring home-port status for such benefits. As the session concluded, it became clear that the most significant threat to American interests might not be foreign influence but rather the lack of a coherent U.S. strategy for maintaining meaningful partnerships in Latin America. The hearing's focus on control and influence obscured more fundamental questions about how the U.S. can become a more attractive partner for infrastructure development and regional cooperation. The Panama Canal's future security may depend less on scrutinizing foreign presences and more on rekindling the kind of robust American partnership that made the canal's success possible in the first place. This requires moving beyond oversight hearings to develop concrete policies that make American companies more competitive in global infrastructure projects and demonstrate long-term commitment to regional development. Nivia Rossana Castrellón is the former deputy minister of foreign affairs of the Republic of Panama.
