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FMC Hearing to Probe Red Sea Shipping

[ February 2, 2024   //   ]

The U.S. Federal Maritime Commission will hold an informal public hearing on Feb. 7 to examine how conditions in the Red Sea and Gulf of Aden regions are impacting commercial shipping and global supply chains.
The FMC is seeking input from supply chain stakeholders on how operations have been disrupted by attacks on commercial shipping emanating from Yemen, actions taken in response, and the resulting effects.
The hearing will also allow the commission to “gather information and identify any new issues related to these disruptions subject to commission statutes, such as implementing contingency fees and surcharges.” Participants are intended to include representatives of vessel-operating common carriers and shippers.
Shippers are facing surging ocean rates and delays as shipping lines divert ships from the Red Sea and the Houthi rebel attacks. London-based Drewry Shipping Consultants said that worldwide costs to ship a 40-foot container have nearly doubled since late November.
The commission said it has been aware that “carriers are announcing rate increases, rules and/or instituting surcharges … to reduce expenses associated with longer voyages and higher costs of insurance and security due to the threats.”
However, the FMC reminded that “these charges must meet strict legal requirements.” The commission “requires common carriers to provide at least 30 days between the publication and effective date of a charge to a tariff that results in increased costs to shippers.” Carriers may submit a special permission request to show good cause to reduce the 30-day waiting period.
The Feb. 7 hearing will be held in the Surface Transportation Board Hearing Room located at 395 E St. SW, Washington. It will be livestreamed for those unable to attend in person.

Carrier rates have nearly doubled since late November, Drewry says. (Source: Reuters)

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