OCEMA, NY/NJ port discussion agreement moves forward

Despite a split vote among the four commissioners currently making up the Federal Maritime Commission, a discussion agreement between the Port of New York and New Jersey and OCEMA will take effect June 25.    Despite a split vote among the four commissioners currently making up the Federal Maritime Commission, a discussion agreement between the Port of New York and New Jersey and the Ocean Carrier Equipment Management Agreement (OCEMA) will take effect June 25.
   A majority vote is required by the commission to take action on an agreement.
   FMC Commissioner William P. Doyle, one of the two commissioners who voted in favor of allowing the discussion agreement to proceed, said the discussion agreement’s members are “sophisticated parties and should be allowed to meet and discuss the cargo facility charge, effective immediately.”
   “The government should get out of their way, so they can get on negotiations,” he added.
   Similarly, Commissioner Daniel B. Maffei said in a statement that he voted to allow the discussion agreement to enter into force without challenge, “as I believe it is not likely that the agreement would violate Section 6(g) of the Shipping Act of 1984.”
   Acting Chairman Michael A. Khouri and Commissioner Rebecca F. Dye were concerned about the significant market share that OCEMA members and its individual carriers control at the Port of New York and New Jersey. They voted against approval in order to seek additional information that would assist the FMC to assess the competitive effects and consequences of the agreement.
   The discussion agreement’s members sought permission from the FMC to discuss and reach agreement on matters related to the cargo facility charge (CFC) the port authority implemented in 2011. Specifically, the parties want to discuss the potential for an alternative billing and collection system for the CFC.
   The CFC has been called a “cost recovery” mechanism, which has helped to fund specific port roadway, rail, and security projects that benefit port users and the region. Collected funds have been used for reimbursement of completed Port of New York and New Jersey projects, such as the ExpressRail (Elizabeth, Newark and Staten Island), McLester St. curve and widening, Port Street and Brewster Road connector, Howland Hook Marine Terminal tracks 6 and 7, and certain post-Sept. 11, 2001 security costs.
   The CFC has also been used by the port authority to help reimburse four projects included in its recently approved 10-year Capital Plan (2017-2026) – the ExpressRail at Greenville Rail Yard (ICTF), Port Street corridor improvements, Port Jersey access, and ICTF offsite improvements.
   “Should the Federal Maritime Commission have further questions during the life of this discussion agreement, we should seek answers to those questions pursuant to the commission’s authority to monitor agreements,” Doyle said in a statement. “Our time would be better well spent addressing other important matters at the commission such as chassis pooling problems and detention and demurrage matters that detrimentally affect American businesses including exporters, shippers, truckers and the shipping public.”
   OCEMA is an association of 19 major U.S.- and foreign-flag international ocean common carriers that provides a forum for its members to discuss operational, safety and related matters pertaining to the intermodal transportation of ocean freight within the United States.