FMC to Double Enforcement Staff, Focus on 'Complex' Cases, Budget Request Says

Part of that funding would go to more FMC enforcement officers. The commission said it’s expecting to increase enforcement staff “by 100 percent” by FY 2025 compared with the beginning of FY 2023, which will “directly support audits, investigations, and enforcement proceedings.”

The FMC said it needs more staff to keep up with its increasing workload. It collected about $2.9 million in civil penalties in FY 2023 and investigated 119 complaints, which led to about $1.7 million in refunds and waivers issued by ocean carriers. That’s an increase from the $700,000 in refunds it ordered in 2022 after receiving its first complaint under the Ocean Shipping Reform Act in July of that year.

The commission noted that the charge complaints it receives are still being submitted under an “interim procedure” announced in December 2022, which was created as the FMC worked to put in place a permanent filing process (see 2212010058). The FMC expects to issue a new rulemaking for that permanent process this year, which likely will “require additional resources,” including at least two full-time employees to “process and investigate these complaints.” It expects the new, permanent process to be “fully operational” in FY 2025.

The budget also outlines FMC efforts to reorganize its Bureau of Enforcement, Investigations and Compliance, which was given the authority last year to issue notices of violations and to settle civil penalty claims without first obtaining FMC approval (see 2304170037 and 2305090037). Although the commission is expecting to ramp up enforcement, it said the BEIC may see an “initial reduction in the number of cases” this year as it hires more employees and as it “transitions its efforts to the pursuit of complex investigations and enforcement actions.”

The FMC listed several types of cases it plans to generally prioritize in FY 2025, including:

• carriers, terminal operators or ocean transportation intermediaries that fail to “establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property”
• illegal demurrage and detention practices and “improper” use of merchant clauses to shift liability on parties not subject to a contract
• carriers that unreasonably refuse to deal or negotiate, including by unreasonably refusing cargo space
• cases involving retaliation
• false or illegal tariff and service contract activities.

Prioritizing “substantive cases will have a larger and more meaningful impact on dissuading improper conduct by companies providing ocean transportation and related services,” the FMC said, adding that it will also put in place more training for BEIC to improve its “investigative capabilities.” It expects to finish hiring for the BEIC this year, and the bureau “will operate with a full cadre of trained investigators, attorneys and analysts by the beginning of FY 2025.”

The budget request also touched on rulemakings mandated by OSRA, all of which are “projected to be completed” before FY 2025. The FMC said implementing OSRA “is a leading priority” and mentioned its long-awaited final rule on unreasonable carrier conduct. Chair Daniel Maffei said in February the commission plans to issue that rule in the coming months (see 2402280067).

The FMC also said it’s making progress on a new data collection effort to better track empty container volumes at ports, including containers that could be used to take exports (see 2305230021). The commission said it’s expecting Office of Management and Budget approval for that effort soon and “data collection to begin thereafter.”

As part of that effort, the FMC is updating its information technology system so ocean carriers can submit the required data and “enable efficient processing and publication of the required quarterly reports,” which will cover “import and export tonnage and the number of laden and empty containers operated by ocean common carriers.” The commission’s IT system also will see other “major” improvements this year and next, and will include new “independent systems and fillable forms” that need to be submitted by “regulated entities,” along with updated systems to “automate compliance checks” for non-vessel operating common carriers.

“The modernized systems will have enhanced analytic capabilities, including dashboards, to support data-driven compliance and enforcement actions and enhance reporting capabilities,” the FMC said. Those updates are expected to begin during the third quarter of FY 2024 and take 36 months.

The commission is also working on a new electronic filing court management system because its current one is “manual, outdated and needs to be replaced to handle increased filings and recordkeeping.” The system will replace the FMC’s current electronic reading room and will allow anyone to view, search, print or download nonconfidential documents, including charge complaint proceedings. The FMC expects the new e-filing system to be online by “mid FY 2025.”