FMC rejects carrier request for shorter notice on ocean rate hikes

“There are certainly circumstances that warrant granting special permission requests,” DiBella wrote. “Sudden shocks to the supply chain can be difficult for both carriers and shippers to absorb. At the same time, granting an exception to the way the Shipping Act allocates risk between shippers and carriers is a significant matter, requiring careful deliberation.” 

DiBella said that while there are increased costs and uncertainties for both carriers and shippers, the liners had not shown good cause.

“In my view, when a carrier seeks special permission to reduce the 30 days’ notice period for a surcharge, the carrier should demonstrate how its increased costs are linked to the dollar amount of the proposed surcharge,” DiBella said. “An assertion that there are increased costs, without any data on what those costs are, how long they may last, and what steps the carrier is taking to mitigate them, is insufficient in demonstrating good cause.”

This transparency, she said, “would assure shippers that surcharges are being used solely to adjust to unpredicted circumstances. This approach … will better balance the risks borne by shippers and carriers, and will increase shipper confidence that carriers are calculating surcharges reasonably.”

Read more articles by Stuart Chirls here.

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