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Freight Forwarding Weekly: FMC to Review Complaints Against Ocean Carriers 🔎

Welcome back to Freight Forwarding Weekly! For shippers, by a shipping container.

It‚Äôs the holidays: 🕎🎄🎉,📦 We hope that you have a tremendous amount of fun with your family, friends, and colleagues.

This week’s edition was edited by Michael, Freight Forwarding Weekly’s analyst. If you are new, this is a recap of this week’s top news stories in the world of global freight and forwarding.

Today’s issue is brought to you by our Premium Member in Australia, CargoMaster.

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📈 BY THE NUMBERS: Important numbers impacting freight and logistics

⛽ Diesel: $4.754 / gal

Compared to a year ago, the average per-gallon price of diesel is up by $1.105. Data via the U.S. Energy Information Administration ‚Äď Week of Dec. 12.

✈️ Air Cargo Index: 213.5 🔽 (October, FRED)

🚢 Global Container Index: $2,384 (Dec. 9)

🌐 TOP STORY: Federal Maritime Commission to review ocean carrier complaints

The U.S. Federal Maritime Commission (FMC) announced that it intends to review over 175 shipper complaints filed against major ocean carriers. Shippers have filed complaints over the past several months largely focusing on excessive detention and demurrage fees. These types of fees are charged when shippers don’t pick up cargo within a predetermined period of time.

Ocean carriers have collected record amounts in demurrage fees because of the pandemic, and the shippers often say that charges levied by the carriers are ‚Äúopaque‚ÄĚ with little pathways to challenge any levied fees. Shippers have responded positively to the opportunity to challenge demurrage fees through frameworks established by the Ocean Shipping Reform Act of 2022.

The Ocean Shipping Reform Act allows shippers to file charge complaints with the FMC. Since the enactment of the law in June of this year, the Federal Maritime Commission has received more than 175 charge complaints. FMC will investigate all filed complaints under interim procedures while the commission develops more permanent processes.

The burden of proof is only dependent on the carriers to prove whether or not their fees were justified. All shippers who have filed complaints aren’t required to testify or provide more info.

Large ocean carriers will of course claim that they face significant challenges and government oversight that isn’t necessarily warranted because of the demurrage crisis prompted by the global pandemic. The reviews need to play out in order for the Federal Maritime Commission and the shipping industry to determine whether the Ocean Shipping Reform Act is an effective policy pathway or not.

Whatever happens, this is major shift in the balance of power between the large shipping lines and their customers, and we will continue to follow it closely.

Do you have a demurrage horror story? We‚Äôd love to hear about it. You can reply directly to this email if you have a story to share…

Read up at Supply Chain Drive.

🤢 NOTEWORTHY: Lawmakers ask Biden to take action on sick days for rail workers

70 lawmakers in support of the rail unions sent a joint letter to President Joe Biden asking that he take executive action to ensure that paid sick leave benefits are granted to railway workers. Led by pro-labor Sen. Bernie Sanders of Vermont, the lawmakers wrote the following: ‚ÄúWhile this agreement was much better than the disastrous proposals put forward by the rail industry, it still does not guarantee a single paid sick day to rail workers who work dangerous and difficult jobs, have risked their lives during the pandemic to keep our economy moving and have not received a pay raise in over three years. That is unacceptable and must be rectified.‚ÄĚ

More at Sen. Sanders’ website.

📺 WATCH: Lawyer and economist James Rickards discuss how broken supply chains could harm the economy on the center-right Lincoln Network‚Äôs Realignment Podcast¬†

James Rickards is the author of Sold Out: How Broken Supply Chains, Surging Inflation, and Political Instability Will Sink the Global Economy. He has written on the gold standard, a lot.

Other stories we’re reading…

💼 New CEO named to lead shipping giant Maersk

Soren Skou is now retiring as the chief executive officer of the Copenhagen-based shipping giant A.P. Moller-Maersk A/S. Skou‚Äôs replacement will be Vincent Clerc ‚Äď the current chief of Maersk‚Äôs Ocean & Logistics business unit. Clerc will enter into the position on Jan. 1, 2023. ‚ÄúWe have never been stronger financially and we have an inspiring and visionary plan for the continuation of our global integrator strategy that will guide Maersk for many years to come,‚ÄĚ Skou said in a statement. Clerc adds in the same statement: ‚ÄúI am thrilled by the trust the Board is showing by giving me the opportunity to lead the next stages of our transformation.‚ÄĚ

Read more at Maersk’s website.

😷China eases up on pandemic measures for seafarers and port workers

The Chinese government’s Ministry of Transport issues new guidance removing the mandate for crew members to provide the results of a COVID test to port operators before vessel berthing at the ports. Negative tests are no longer needed within two days or a health code for clearance. Easing COVID quarantine policies means that people with mild symptoms and asymptomatic infections can stay home, while seafarers and port workers can change shifts and return home. The ministry’s new guidelines are a part of the Chinese government’s drawback on zero-covid.

Read more at Seatrade Maritime News.

🌊South Korean government promises support for shipping companies

Cho Seung-hwan, the South Korean minister for oceans and fisheries, assured the national container shipping industry that his ministry would help reduce the damage from free-falling freight rates around the world. Minister Cho told South Korean industry leaders that ‚Äúwe will do our best to maintain the international competitiveness of our shipping industry, no matter what difficult situation arises. ‚ÄúI hope shipping companies will actively respond to the market with a more active attitude, thorough preparation, bold decisions, and changes,‚ÄĚ the minister promised.

Check out the story at The Loadstar.

⚠️ A few more stories, directly and indirectly, impacting shipping‚Ķ

Thanks for reading the latest edition of Freight Forwarding Weekly. Stay tuned for more! If a colleague has forwarded you this email and you’d like to sign up to get future issues, click here.

The current edition of our newsletter was written by Michael M., Freight Forwarding Weekly’s chief news analyst. Do you have a tip or do you want us to cover something? Tell us by replying.