The U.S. Federal Maritime Commission (FMC) on Thursday afternoon voted to extend an order that allows service contracts to be filed up to 30 days after they take effect to provide relief to shippers, freight forwarders and consolidators, and ocean container carriers impacted by the coronavirus pandemic.
The initial order, which the FMC approved on April 27, had been scheduled to expire Dec. 31. However, the commission approval of the order’s extension will provide the ocean container shipping industry flexibility going into the spring contract negotiation period.
The commission said the order will now remain in effect through June 1, 2021.
“Extending this relief on service contract filing deadlines through the upcoming negotiating season assures that carriers and shippers are able to continue to do business without running afoul of the law,” said FMC Commissioner Rebecca Dye in a statement.
Under the Shipping Act, service contracts reached between ocean carriers and shippers must be filed within 30 days to the FMC for monitoring competition of U.S. container shipping. The FMC, however, has authority under the legislation to make certain regulatory adjustments when necessary.
The relief measure was first identified by the Fact Finding 29 Supply Chain Innovation Teams, which includes more than 50 industry representatives who hold regular telephone meetings with Dye to identify pain points in container shipping due to the COVID-19 pandemic. Spring is the period when most annual service contracts are concluded between ocean carriers and shippers.
The FMC said information provided by Fact Finding 29 Supply Chain Innovation Team members shows that service contract negotiations are currently being disrupted by the COVID-19 pandemic.
On March 31, the FMC authorized Fact Finding 29 to work with representatives from the container-shipping industry to identify “operational solutions to cargo delivery challenges” caused by the coronavirus pandemic.