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FMC creates audit programme for ocean carriers

FMC creates audit programme for ocean carriers
The announcement follows President Biden's executive order

The Federal Maritime Commission (FMC) has established a new audit programme to assess carrier compliance with the regulator’s rule on detention and demurrage.

Earlier in July, President Biden signed an executive order which featured a call for the FMC to act against carriers charging exorbitant fees to exporters.

The ‘Vessel-Operating Common Carrier Audit Programme’ was established on July 19 at the direction of FMC Chairman Daniel B. Maffei and launched immediately.

The programme will analyse the top nine carriers by market share for compliance with the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices in the US.

The FMC will work with companies to address their application of the rule and clarify any questions or ambiguities. Information supplied by carriers may be used to establish industry best practices.

Maffei stated: “The FMC is committed to making certain the law is followed and that shippers do not suffer from unfair disadvantages. The work of the audit team will enable the Commission to monitor trends in demurrage and detention practices and revenue, as well as to establish ongoing dialog between staff and carriers on challenges facing the supply chain.

“Of course, if the audit team uncovers prohibited activities, the Commission will take appropriate action. Furthermore, the information gathered by the audit process might lead to changes in FMC regulations and industry guidance if warranted.”

The audit programme will begin with an information request establishing a database of quarterly reports allowing the Commission to assess how detention and demurrage is administered. Responses will be followed by individual interviews with the carriers.

Each of the nine largest carriers by market share will be audited irrespective of whether a formal or informal complaint has been filed at the Commission.

Lucille Marvin, the Commission’s managing director, will lead both the audit program and the audit team, which will initially be comprised of existing Commission employees.