Washington, DC – Today, bipartisan leaders of the House Committee on Transportation and Infrastructure and the Subcommittee on Coast Guard and Maritime Transportation called on the Federal Maritime Commission to ensure that ocean carriers are abiding by U.S. law and are not engaging in unjust and unreasonable shipping practices resulting from the COVID-19 pandemic.

Committee on Transportation and Infrastructure Chair Peter DeFazio (D-OR), Ranking Member Sam Graves (R-MO), Subcommittee on Coast Guard and Maritime Transportation Chair Salud Carbajal (D-CA), and Subcommittee Ranking Member Bob Gibbs (R-OH) highlighted their concerns about disruptions in the maritime supply chain as a result of the pandemic, how many ocean carriers have prioritized higher value foreign goods over U.S. agricultural products, and asked questions in a letter to Michael A. Khouri, Chairman of the Federal Maritime Commission.

“These carriers have elected to ship empty containers back to foreign ports while increasing charges on agricultural exports up to $500 per container to China and other Asian countries, resulting in limited shipping capacity for U.S. farm exporters,” the Transportation and Infrastructure leaders wrote. “This has led to widespread spoilage of produce and threatens not only the financial wellbeing of our farmers, but also the reliability of our domestic agriculture industry as an international trade partner, the delivery schedules for other intermodal components of the supply chain, the lifeblood of our rural communities, and the broader U.S. economy.”

The full letter can be found below and here.

March 8, 2021

The Honorable Michael A. Khouri

Chairman, Federal Maritime Commission

Federal Maritime Commission
800 North Capitol Street, NW
Washington, D.C. 20573

Dear Chairman Khouri:

As you are aware, the COVID-19 pandemic completely upended the shipping industry, resulting in severe backups at ports and disrupting every link in the maritime supply chain.[1] Unprecedented demand for imported products due to the consumer shift toward mass home delivery has exacerbated our trade imbalance with foreign countries.[2]

In response, many ocean carriers have prioritized higher value foreign goods over U.S. agricultural products.[3] These carriers have elected to ship empty containers back to foreign ports while increasing charges on agricultural exports up to $500 per container to China and other Asian countries, resulting in limited shipping capacity for U.S. farm exporters.[4] This has led to widespread spoilage of produce and threatens not only the financial wellbeing of our farmers, but also the reliability of our domestic agriculture industry as an international trade partner, the delivery schedules for other intermodal components of the supply chain, the lifeblood of our rural communities, and the broader U.S. economy.

Sales of U.S. agricultural products to foreign markets account for one-fifth of U.S. agricultural production, representing $136 billion and approximately 8 percent of total U.S. exports in FY 2020.[5] The economic benefits of agricultural exports also extend across rural communities, while overseas farm sales help to buoy a wide array of industries linked to agriculture, including transportation, processing, and farm input suppliers.[6] Further, the U.S. Department of Agriculture’s  Economic Research Service forecasts inflation-adjusted U.S. net cash farm income to decrease $10.4 billion and for U.S. net farm income to decrease $12.0 billion in 2021.[7]

We are writing to ask that the Federal Maritime Commission takes immediate action to ensure that ocean carriers are abiding by subtitle IV, Regulation of Ocean Shipping, of title 46, United States Code, popularly known as the Shipping Act. Specifically, we would like to know:

1. If Commissioner Dye’s Fact Finding 29 investigation on International Ocean Transportation Supply Chain Engagement found that the carriers and MTOs are operating in compliance with the Interpretive Rule on Detention and Demurrage that became effective on May 18, 2020.[8]
2. Whether there have been any violations of 46 U.S.C. 41102(c), which prohibits unjust and unreasonable ocean shipping practices and regulations related to, or connected with, receiving, handling, storing, or delivering property.

If you have questions, please contact Matt Dwyer, Democratic Staff Director, Subcommittee on Coast Guard and Maritime Transportation at 202-225-4472, or John Clark Rayfield, Republican Staff Director, Subcommittee on Coast Guard and Maritime Transportation, at 202-225-3372. We appreciate your attention to this matter and look forward to hearing any updates from the Federal Maritime Commission.

Sincerely,

PETER A. DeFAZIO
Chair

SAM GRAVES
Ranking Member

SALUD CARBAJAL
Chair
Subcommittee on Coast Guard and Maritime Transportation

BOB GIBBS
Ranking Member
Subcommittee on Coast Guard and Maritime Transportation
 

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