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Can an FMC Order Break the Cargo Logjam at Ports?


The recently enacted Ocean Shipping Reform Act of 2022 gave the U.S. Federal Maritime Commission stronger oversight of how ocean carriers and marine terminals treat shippers. Now, FMC is being called on to wield some of that power.

Signed into law by President Biden in June of this year, the act boosts FMC’s authority “to promote the growth and development of U.S. exports through an ocean transportation system that is competitive, efficient and economical.”

The current system is anything but that. It’s been plagued by port congestion, cancelled sailings, labor shortages, soaring freight rates, high surcharges and lack of chassis and other equipment. One of the major factors behind the dysfunction, critics say, is the failure of the parties involved in moving cargo — ocean carriers, port terminals, truckers, railroads and third parties — to share information about cargo throughput and availability in a timely fashion. 

In response, FMC is considering issuance of a 60-day emergency order that would mandate such data-sharing. Over the summer, it launched a 30-day comment period that expired on September 14.

Congestion at Southern California ports has lessened considerably since last year, when dozens of ships were being held offshore for days or weeks at a time, waiting for a berth at which to unload. But serious bottlenecks have subsequently appeared at East Coast ports. In fact, the greatest pressure for an emergency order in recent months has come from drayage truckers at the Port Authority of New York and New Jersey.

What they want is for FMC to require cargo handlers and processes to share information on such events as the expiration of free time for containers held up on the docks, the number and status of containers being picked up and returned, and the availability of appointment slots for truckers to fetch boxes at the terminals.

For FMC to issue a data-sharing order, it would need to determine that congestion at the ports was adversely affecting cargo flow, and that such an order would help to alleviate the problem.

Data-sharing among various parties in the system seems like an obvious and welcome solution to the logjam. The question is what form it should take, who should spearhead it, and whether FMC is the right entity to make it happen — particularly since the commission’s mandate would only last for 60 days.

The companies that would be responsible for making the necessary investments in data-sharing, including creation of application programming interfaces (APIs) to integrate disparate systems, have to be convinced that their investment would pay off well beyond the lifespan of the commission’s emergency order, says Frank Kenney, director of market strategy with Cleo, provider of a software platform for B2B integration.

What’s more, it’s unclear what a system for achieving the desired goal would actually look like. Would it involve APIs that offer a real-time view into carriers’ and logistics providers’ transportation management systems and dispatch networks? Or, where smaller trucking companies were involved, would a spreadsheet or some kind of basic portal suffice? Drayage truckers that submitted letters during the comment period were vague about details, focusing instead on the pain they’ve experienced due to lack of access to data about the status of loads. “I thought there would be more feedback around the format that we want this information to be in,” says Kenney. “But what we’re hearing is a lot more emotional.”

The one entity that can’t be expected to craft a detailed solution is FMC. “They’re not technologists,” Kenney says, adding that it’s up to the private sector to build the required system. “But I don’t know how these companies would put into place processes to consume that information and make it actionable for something that may last only 60 days.” 

The best efforts of private entities to share data still might not prevent “black holes” of information that occur when Customs holds up a container for inspection. Kenney even suggests that the government agencies, especially the Department of Homeland Security, might oppose a system that leads to total transparency of cargo working its way through the system. “It makes it easier to circumvent processes,” he says.

There’s no doubt, however, that data visibility as a means of reducing congestion is a desired goal by all parties. And progress by the private sector in that direction is unlikely to be reversed with the expiration of an FMC order.

“This has to happen,” says Kenney. “A long-term change in the status quo — involving innovative and modern structural change — is absolutely necessary.”

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  • Source: https://www.supplychainbrain.com/blogs/1-think-tank/post/35691-can-an-fmc-order-break-the-cargo-logjam-at-ports

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