FMC Chairman Maffei meets with US Maritime Administration Commandant Ann Phillips

As part of the new Shipping Reform Act the Federal Maritime Commission (FMC) announced it’s reorganizing its enforcement structure and plans to hire more investigators to crack down on ports and foreign-owned shipping companies who are breaking the law. The investigative and prosecution functions of the FMC will now be consolidated into a newly created Bureau of Enforcement, Investigations, and Compliance (BEIC). This change is effective immediately.

This announcement comes weeks after President Biden visited the Port of Los Angeles and foreign blamed carriers for contributing to inflation while raking in huge profits during the COVID-19 container shipping boom.

“Every once in a while, something you learn makes you viscerally angry. Like if you had the person in front of you, you’d want to pop them. No, I really mean it,” President Biden said in June, adding: “That’s why I called on Congress to crack down on foreign-owned shipping companies that raise their prices while raking in, just last year, $190 billion in profit — a seven-fold increase in one year,” President Biden said.

The FMC’s BEIC will be divided into three sections: the Office of Enforcement, the Office of Investigations, and the Office of Compliance. These offices will each be led by an Office Director.

“Robust enforcement of the Shipping Act is absolutely key to the effectiveness of the Federal Maritime Commission,” said FMC Chairman Daniel B. Maffei. “This reorganization creates a structure better suited to meeting the mandate the President and Congress have given this agency to prioritize enforcement. Specifically, it enhances FMC’s capacity to closely scrutinize the conduct of the ocean carrier companies and marine terminal operators.”

The reorganization follows an internal examination undertaken to identify how to increase the effectiveness of Commission enforcement and compliance. The review determined the merging of enforcement and compliance programs would result in a more efficient, coordinated, and responsive operation.

As part of the reorganization, the Commission is converting the positions of Area Representatives to Investigators, placing them in the Office of Investigations. Additionally, the Commission will increase the number of investigators it has on staff. Investigators will now focus exclusively on enforcement activity and the public outreach function formerly handled by the Area Representative role will be handled by the Commission’s Office of Consumer Affairs and Dispute Resolution Services as part of their broader public assistance work.

The U.S. Federal Maritime Commission (FMC) has new authority and funding thanks to the Ocean Shipping Reform Act of 2022 (OSRA), which President Biden signed into law in June. The new law, which was introduced in the Senate in February by Senator Amy Klobuchar (D-MN) and passed unanimously at the end of March, gives the Federal Maritime Commission (FMC), the independent federal agency responsible for the regulation of international ocean shipping, greater authority to regulate certain ocean carrier practices and to promote the growth and development of U.S. exports “through a maritime system that is transparent, efficient, and fair.” Text of the bill can be found here.

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