Fact Finding Launched to Examine Household Goods and Personal Property Shipping Practices
June 23, 2010
Contact: Karen V. Gregory, Secretary (202-523-5725)
By unanimous vote, the FMC initiated Fact Finding Investigation No. 27 into complaints or inquiries from individual shippers of household goods and personal property in U.S.-foreign oceanborne trades. This investigation will further the Commission's Strategic Goal to protect the public from unlawful, unfair or deceptive ocean transportation practices and resolve shipping disputes. Commissioner Michael A. Khouri has been named to lead the Fact Finding.
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.
The Commission's Fact Finding Order notes that 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.
According to reports, individuals and companies have held themselves out to perform ocean transportation to the public and accepted responsibility for the transportation of these shipments without obtaining an Ocean Transportation Intermediary (OTI) license and providing required proof of financial responsibility to the Commission. In some cases, vessel operating common carriers (VOCCs) or non-vessel operating common carriers (NVOCCs) may have received cargo from these unlicensed individuals or entities in violation of the Shipping Act.
Chairman Richard A. Lidinsky, Jr. stated, "I want to thank Commissioner Khouri for taking the lead in investigating this crucial issue for the shipping public. Protecting consumers from fraudulent or deceptive practices is one of the Obama Administration's top goals for the Commission, and this investigation takes aim at abusive practices that directly impact thousands of American consumers who ship their household goods overseas. I have full confidence that under Commissioner Khouri's guidance, this Fact Finding Investigation will shed valuable light and inform new actions and policy improvements by the FMC and Congress to protect consumers."
Commissioner Khouri noted, "The shipment of household goods is becoming a serious and substantial consumer protection problem within the Commission's area of responsibility. I am concerned not only about the number of complaints received by the Commission, but that many of those complaints come from individuals who are first-time or very occasional users of international shipping services. The Commission has a duty to examine this issue and consider appropriate steps to protect the shipping public."
Fact Finding 27 is intended to develop a record on the nature, scope and frequency of the problem of potentially unfair, unlawful or deceptive practices within the Commission's jurisdiction in the shipping of household goods or personal property from various locations in the United States to foreign destinations and report findings to the Commission with recommendations for any Commission action. An interim report is due to the Commission not later than November 15, 2010, with a final report due not later than February 15, 2011.