The recently enacted Ocean Shipping Reform Act of 2022 gave the US Federal Maritime Commission greater oversight over how shipping lines and ocean terminals treat shippers. Now FMC is being asked to wield some of that power.
The law, signed into law by President Biden in June of this year, strengthens FMC’s authority to “encourage the growth and development of U.S. exports through a competitive, efficient, and economical maritime transportation system.”
The current system is anything but. It has been plagued by port congestion, canceled sailings, labor shortages, rising freight rates, high surcharges, and shortages of landing gear and other equipment. According to critics, one of the main reasons for the malfunction is the failure of the parties involved in cargo transportation – shipping companies, port terminals, truck drivers, railways and third parties – to exchange information on cargo throughput and availability in a timely manner.
In response, FMC is considering issuing a 60-day emergency order mandating such sharing of data. A 30-day comment period was introduced over the summer, which expired on September 14th.
Congestion in Southern California’s ports has eased significantly since last year, when dozens of ships were stranded offshore for days or weeks waiting for a berth to unload. However, serious bottlenecks have subsequently emerged in the ports on the East Coast. In fact, the biggest push for an emergency order in recent months has come from the New York and New Jersey Port Authority truck drivers.
What they want is for FMC to require cargo handlers and processes to share information about events such as the expiration of free time for containers being held on the docks, the number and status of containers picked up and returned, and the availability of appointment slots for Truckers to pick up boxes at the terminals.
In order for FMC to issue a data-sharing order, it would need to be established that port congestion is affecting the flow of cargo and that such an order would help alleviate the problem.
Sharing data between different parties in the system seems to be an obvious and welcome solution to the blockage. The questions are what form it should take, who should lead it and whether FMC is the right entity to make it happen – especially since the commission’s mandate would only last 60 days.
The companies that would be responsible for the necessary investments in data exchange, including the creation of application programming interfaces (APIs) to integrate disparate systems, need to be confident that their investment would pay off well beyond the duration of the Commission’s emergency order. says Frank Kenney, director of market strategy at Cleo, a software platform provider for B2B integration.
In addition, it is unclear what a system for achieving the goals would look like in concrete terms. Would it include APIs that provide real-time visibility into carriers’ and logistics providers’ transportation management systems and shipping networks? Or would a spreadsheet or a simple portal suffice for smaller haulage companies? Truck drivers who submitted letters during the comment period were vague about details, instead focusing on the pain they have experienced from not having access to data on the status of the loads. “I thought there would be more feedback on the format that we would like this information in,” says Kenney. “But what we hear is much more emotional.”
The only entity that cannot be expected to develop a detailed solution is FMC. “They’re not technologists,” says Kenney, adding that it’s up to the private sector to build the required system. “But I don’t know how these companies would set up processes to take that information and make it actionable for something that might only take 60 days.”
The best efforts by private companies to share data may still not prevent “black holes” of information created when customs hold a container for inspection. Kenney even suggests that government agencies, particularly the Department of Homeland Security, could oppose a system that results in complete visibility into cargo moving through the system. “It makes it easier to circumvent processes,” he says.
However, there is no doubt that data transparency as a means of reducing congestion is a desired goal by all parties. And private sector advances in this direction are unlikely to be reversed when an FMC order expires.
“This has to happen,” says Kenney. “A long-term change in the status quo – with innovative and modern structural change – is imperative.”