FMC Pushing for More Carrier Transparency After Red Sea Surcharges

The Federal Maritime Commission has been encouraging carriers to have a better relationship and more transparency with shippers, FMC Chairman Daniel Maffei said during a hearing held by the House Subcommittee on Coast Guard and Maritime Transportation on April 30. Maffei said that this issue stems from the lack of transparency surrounding the Red Sea-related surcharges imposed by carriers due to Houthi attacks on commercial ships (see 2401290052).

While shippers generally understood that carriers faced increased costs because they were forced to divert ships from their usual route because of disruptions in the Red Sea, the shippers didn't understand what those extra charges were being used for or how carriers were justifying the charges, Maffei said. The commission discussed this and other issues during a hearing on the surcharges in February (see 2402070078), and Maffei said the FMC will continue to investigate "any allegations" that these charges are not being levied appropriately.

The National Customs Brokers & Forwarders Association of America has asked for more transparency surrounding the surcharges (see 2402120039).

Maffei's comments came in response to a question from Rep. Salud Carbajal, D-Calif., who asked about the FMC's efforts to contact carriers during times of crisis, such as the shipping disruptions in the Red Sea and the collapse of the Francis Scott Key Bridge in Baltimore in March (see 2403260047). Maffei said the Navy, the Army Corps of Engineers and other agencies are working to reopen the channel, and the shipping impact isn't expected to last long. The U.S. hopes to fully reopen the channel by the end of May, the U.S. Army Corps of Engineers said last month (see 2404080053).

Maffei said the impact in the short term has been "overstated" because there are alternatives for shipping to the Port of Baltimore, Maffei said. "I can't imagine it affecting overall inflation" in the U.S., Maffei said.

But he stressed that the Port of Baltimore is an important port in the long term for the U.S. supply chain, Maffei said, as it is a "deepwater" port and "probably" the fastest growing port on the East Coast. If something were to happen to a different port on the East Coast and Baltimore wasn't a working port, it could be a bigger problem for the U.S. supply chain.

"These ports compete, but when it comes to a disaster like this, they all work together," Maffei said.