FMC SEEKS COMMENTS ON ‘UNREASONABLE REFUSAL TO DEAL’ RULE
The US Federal Maritime Commission (FMC) issued on 13 September a Notice of Proposed Rulemaking (NPRM) implementing a requirement of the Ocean Shipping Reform Act of 2022 (OSRA) to define unreasonable refusal to deal or negotiate with respect to vessel space accommodation provided by an ocean common carrier.
The NPRM outlines the elements which would be necessary to establish a violation and the criteria the Commission would consider in assessing reasonableness if the NPRM is finalised. The FMC notes that an ocean carrier must avoid shutting down person or party for reasons not connected to legitimate transportation-related factors and must give actual consideration to the other party’s efforts or attempts at negotiation. For example, a carrier’s repeated refusal to respond to email or telephone requests for negotiations over an extended period of time may be viewed as an unreasonable method of shutting another party out.
The proposed rules, which would apply to both import and export shipments would also shift the burden of proving the refusal to deal was reasonable from shippers to ocean carriers: The FMC would consider whether the carrier followed a documented export strategy, engaged in good faith negotiations, and articulated legitimate transportation factors. However, the Commission recognises that as the circumstances of each shipment is unique, cases alleging a violation will be considered on a case-by-case basis by the FMC’s Bureau of Enforcement, Investigations, and Compliance.
The NPRM is open for public comments until 13 October. The OSRA requires the FMC to publish a Final Rule within six months of OSRA’s enactment, which was signed into law by US President Biden on 16 June.
Source: FMC