INDUSTRY GROUPS WANT FMC TO SOFTEN PENALTY REGIME

INDUSTRY GROUPS WANT FMC TO SOFTEN PENALTY REGIME    Shipper and ocean transportation intermediary trade groups are speaking out against the U.S. Federal Maritime Commission’s use of multimillion-dollar penalties for violations of the country’s shipping regulations.
   The National Customs Brokers and Forwarders Association of America, Transportation Intermediary Association, National Industrial Transportation League, and NVOCC-Government Affairs Conference filed amicus curiae briefs to the FMC protesting a recent $4-million penalty against the former Sea-Land Service.
   The case involves the use of “equipment substitution” by Sea-Land and its customers in the westbound transpacific during 1996-98. In the initial decision, the FMC’s administrative law judge found that certain Sea-Land employees and departments “knowingly and willfully” participated in equipment substitution and recommended a maximum penalty amount against the carrier.
   The industry groups pointed out in their briefs that Congress intended to de-emphasize the FMC’s enforcement of tariffs by enacting the1998 Ocean Shipping Reform Act.
   “Both Congress and the FMC repeatedly indicated that there should be primary reliance on market forces with enforcement action reserved for those situations where the misconduct distorts the market,” the NCBFAA said.
   The industry groups support restricting the FMC’s enforcement policies and use of substantial penalties for only serious violations of the Shipping Act.