Household Goods and Personal Property Shipping Practices Considered by FMC
December 9, 2010
Contact: Karen V. Gregory, Secretary (202-523-5725)
At its meeting on December 8, 2010, the Commission considered and approved for immediate action a number of recommendations contained in the Interim Report for Fact Finding Investigation No. 27. The Commission initiated this non-adjudicatory investigation on June 23, 2010, to develop a record on the nature, scope and frequency of potentially unfair, unlawful or deceptive practices in the shipping of household goods or personal property within the Commission's jurisdiction. Commissioner Michael A. Khouri, the Fact Finding Officer, presented the Fact Finding Team’s preliminary observations and conclusions about the nature and scope of the problem, recommendations for immediate action, and topics for further development.
Each year, the FMC receives a substantial number of complaints from individuals that have experienced various problems with their international household goods shipment. Between 2005 and 2009, the Commission received over 2,500 such consumer complaints related to household goods moving companies transporting personal effects and vehicles between various locations in the United States and foreign destinations. Typical complaints allege failure to deliver the cargo and refusal to return the pre-paid ocean freight; loss of the cargo; significant delay in delivery; charges to the shipper for marine insurance that was never obtained; misinformation as to the whereabouts of the cargo; significantly inflated charges after the cargo was tendered and threats to withhold the shipment unless the increased freight was paid; or failure to pay the common carrier engaged by the company as another intermediary. In many cases, a shipper has been forced to pay another carrier or warehouse a second time in order to have the cargo released.
During the first phase of the Fact Finding, the Team interviewed individual shippers, ocean transportation intermediaries (OTIs), local and national trade associations representing OTIs and household goods movers, vessel operating common carriers, and other government agencies. The Fact Finding Team conducted interviews and meetings in Washington, DC, New York, NY, Miami, FL, and San Diego, CA. The Fact Finding Team identified two distinct and separate cargo trades: 1) the international movement of household goods for relocation by individuals who use the internet to find a moving service or the "internet-based market"; and 2) the "barrel trade" where individuals -- primarily from various local communities -- send small shipments of personal goods to relatives or friends in their home countries in Latin America and the Caribbean Basin on a semi-regular basis.
Commissioner Khouri presented the following recommendations for immediate action, which were approved by the Commission:
- Further develop the Commission’s website content to assist consumers as they choose international shipping options;
- Formalize cooperation with other governmental agencies in the household goods area;
- Enhance cooperation with trade associations representing household goods movers;
- Develop informational documents tailored to household goods consumers for use and distribution by OTIs;
- Target outreach to local communities that regularly ship household goods overseas;
- Develop an advisory asking that licensed OTIs link their websites to the FMC’s website; and
- Encourage internet-based "lead source providers" to link their website to the FMC website and check the license status of mover clients.
Industry "Best Practices" and Model Forms:
- Engage with industry groups and consumers to develop a set of "best practices" and model shipping forms that address consumer issues raised by the Fact Finding; and
- Develop an advisory for Commission consideration that would recommend the use of these practices and forms to licensed OTIs in the household goods business.
- Prepare recommendations specifically related to the movement of household goods for inclusion in any draft regulation developed by the Commission working group currently considering changes to existing licensing rules and regulations for OTIs.
- Develop guidelines and procedures to facilitate and implement joint law enforcement efforts to protect consumers and address problem household movers; and
- Develop an agency enforcement strategy focused on entities offering services related to the transportation of household goods in U.S. - foreign container trades.
Alternative Dispute Resolution (ADR):
- Promote alternative dispute resolution services provided by the Commission which assist consumers experiencing problems with household goods movements.
Additional options will be developed for consideration by the Commission during the second phase of the investigation and will be addressed in the February 15, 2011 Final Report.
Commissioner Khouri stated that "I am pleased that the Commission undertook this investigation because it seeks to address a consumer protection issue that affects many average citizens who are most often first-time or very occasional users of international shipping services. The steps approved by the Commission today will result in the immediate focus of agency resources on educating and assisting consumers, facilitating industry ‘best practices’, and targeting enforcement efforts on rogue household goods movers. I look forward to developing additional measures to protect the shipping public during the second phase of this investigation."
Chairman Richard A. Lidinsky, Jr. said: "Commissioner Khouri and his team members have produced excellent findings and recommendations that will significantly advance the Commission’s mission to protect the public from unfair and deceptive practices. I look forward to working to implement these thoughtful measures, and to the team’s final report in February."
The Federal Maritime Commission (FMC) is the independent federal agency responsible for regulating the nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.