Legal Definitions - FMC

The Federal Maritime Commission (FMC) is an independent agency of the U.S. government responsible for regulating the international ocean transportation system of the United States. Its primary role is to ensure a competitive and reliable international ocean transportation system, protecting shippers, carriers, and the public from unfair practices and ensuring compliance with U.S. shipping laws.

• Example 1: Investigating Anti-Competitive Practices

  A group of U.S. furniture manufacturers suspects that several major international shipping lines have secretly agreed to charge artificially high rates for transporting their products from Vietnam to American ports. They believe this collusion is making their imported goods more expensive and less competitive in the domestic market.

  The FMC would investigate this complaint. Its mandate includes preventing anti-competitive agreements and ensuring that ocean freight rates are just and reasonable. If collusion is found, the FMC has the authority to impose penalties and order corrective actions to restore fair competition in the shipping industry.

• Example 2: Resolving Shipper Disputes with Freight Forwarders

  A small American business importing specialty coffee beans from Colombia experiences significant delays and unexpected, unitemized "port congestion fees" from the ocean freight forwarder they hired. The business believes these charges are unwarranted and disproportionate to the service received, leading to financial losses.

  The FMC provides a mechanism for shippers to file complaints against ocean common carriers and freight forwarders regarding unfair practices, unreasonable charges, or service contract disputes. The FMC can mediate such disputes or initiate enforcement actions to protect businesses from predatory or non-compliant practices by licensed intermediaries.

• Example 3: Licensing Ocean Transportation Intermediaries

  A new logistics company wants to establish itself as an Ocean Transportation Intermediary (OTI) to arrange ocean shipping for clients between the U.S. and various international ports, acting as a non-vessel-operating common carrier (NVOCC).

  The FMC is responsible for licensing and bonding OTIs, which include ocean freight forwarders and NVOCCs. This licensing process ensures that these entities meet financial responsibility requirements and adhere to regulatory standards, thereby protecting the public and maintaining integrity in the shipping industry by ensuring only qualified and compliant businesses operate.