Although factories in China began reopening their doors during the last month, many complications have started settling in more heavily for supply chains in the US. The closing of non-essential stores and factories on US soil due to COVID-19 restrictions has led to canceled shipping orders and requests for keeping shipping containers in US ports. The shipping industry and related supply chain sectors now face several challenges, such as finding cargo storage space for offloaded shipments or facing potential detention and demurrage charges if they are unable to do so.
The Federal Maritime Commission (FMC) recognizes these tough conditions brought by the pandemic for the trade industry, as well as the importance of supporting the industry and taking measures to maintain fluid supply chains. On March 31, 2020, the commission opened a new Fact-Finding (FF) Investigation No. 29, involving the formation of Innovation Teams to support efforts in identifying solutions to problems in the cargo delivery system related to COVID-19.
Fact-Finding Investigations No. 29 and No. 28
The FF No. 29 investigation, under the full name of FF No. 29 International Ocean Transportation Supply Chain Engagement, aims to address the following concerns:
Providing relief and assistance to mitigate negative impacts felt by the supply chain with regards to the COVID-19 pandemic.
Determining how ocean cargo delivery companies can respond to existing challenges and bottlenecks in the supply chain.
Identifying how various actors within the supply chain can strengthen the overall performance of the freight delivery system in the US.
The FMC appointed Rebecca Dye as Commissioner of the investigation, giving her authority to establish one or more Innovation Teams to support these goals. Dye recently used such Innovation Teams during a related and ongoing investigation called FF No. 28, which looked into revising demurrage and detention charges.
Current problems with offloading and storing cargo at ports have led to heightened concerns about these charges, prompting renewed discussion about FF No. 28. Due to the critical COVID-19 situation, the FF No. 28 team pressed for a conclusion and finally issued a new guidance on detention and demurrage on April 28th. Additionally, Commissioner Dye and the FF No. 29 team continue to work to foster collaboration between the FMC and industry leaders representing all sectors of the maritime cargo system.
Collaboration Across the Industry
One of the first steps Commissioner Dye is taking to navigate during the current disruption is opening up lines of communication between the FMC, port directors as well as various leaders throughout the supply chain. Many of these leaders will form part of the FF No. 29 Innovation Teams, and all are welcome to contribute by providing comments and information about the effects of the pandemic on business.
Already, various entities including the Port Authority of New York and New Jersey, Georgia Ports Authority, Virginia International Gateway and Norfolk International Terminals, South Carolina Ports Authority, and Northwest Seaport Alliance have taken the initiative to increase storage capacity. For more details regarding these investigations or for assistance with your transportation needs, contact one of our logistics experts today.