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Federal Maritime Commission Creating Supply Chain Innovation Teams

Federal Maritime Commissioner Rebecca F. Dye is convening six Supply Chain Innovation Teams to identify and implement improvements to the process and timing of return and delivery of containers to marine terminals.

The announcement came at a Tuesday meeting of the Federal Maritime Commission (FMC), where briefings were provided on topics related to conditions in the marketplace for container shipping services, the current state of the ocean-linked supply chain, and the commercial and operational behavior of shipping lines.

Dye said her goals for the teams’ work are two-fold. First, for truckers to be able to return an empty container to a terminal and pick up a loaded container, commonly referred to as a “double move.” The second is to bring certainty and predictability to the earliest return date process to address exporter complaints about the unreliability of the deadline for getting cargo to a terminal.

Teams will focus their efforts on improving conditions at the twin Ports of Los Angeles and Long Beach, and the Port of New York and New Jersey–the two largest port complexes in volume in the country. The teams will be comprised of executives from each ocean carrier operating in an alliance and from the marine terminal operators that serve them. The first meetings of the teams will be held Dec. 1, the FMC said.

“Achieving double moves for truckers would improve trucker productivity and remove a constant source of conflict over container return, as well as resolve problems with appointment systems and chassis shortages,” said Dye, who formed the teams under her authority fact finding officer, said. “Earliest return date confusion is a terrible problem for U.S. exporters. This reform would also remove the constant problem to U.S. agricultural exporters of demurrage and detention charges that are not in compliance with our interpretative rule.”

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FMC chairman Daniel B. Maffei endorsed this latest initiative to address supply chain congestion issues, and said he applauded “her continuing efforts to use the commission’s statutory authorities to improve conditions contributing to inefficiencies in the nation’s ocean supply chain.”

In the open session of the meeting, the FMC was briefed on U.S. macroeconomic indicators and their associated impact on shipping, the state of the U.S.-international ocean trades, vessel capacity and pricing. In closed session, commissioners were briefed on ocean carrier revenue and pricing, capacity, cancelled sailings and port calls.

On the issue of pricing, Drewry’s composite World Container Index (WCI) decreased 0.5 percent to $9,146.41 per 40-foot container of equivalent unit (FEU) for the week ended Nov. 18, but remained 238 percent higher than a year ago.

The WCI year-to-date was $7,374 per FEU, which was $4,724 higher than the five-year average of $2,650 per FEU.

Freight rates from the Shanghai to New York route gained 3 percent or $421 to reach $13,139 per FEU. Spot rates from Shanghai-Los Angeles grew 1 percent to $10,038 per FEU.

However, rates on Shanghai-Rotterdam dropped 3 percent, or $401, to reach $13,400 per FEU, while rates on Los Angeles-Shanghai declined 2 percent to $1,275 per FEU. Rates on Rotterdam-Shanghai, Shanghai-Genoa, New York-Rotterdam and Rotterdam-New York hovered around previous weeks level. Drewry expects rates to remain steady in the coming week.