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Statement from Commissioner Maffei on the Port of New York & New Jersey/OCEMA Discussion Agreement

June 22, 2017

Commissioner Daniel B. Maffei voted today to allow the Port of New York & New Jersey/OCEMA Discussion Agreement, FMC Agreement No. 012484, to take effect on June 25, 2017 without Commission challenge. The Commissioner had the following comments regarding the Agreement and its entry into force:

I voted to allow the Port of New York & New Jersey ("Port")/OCEMA Discussion Agreement ("Agreement") to enter into force without challenge from the Commission as I believe it is not likely that the Agreement would violate Section 6(g) of the Shipping Act of 1984. The purpose of the Agreement is to allow the Port and ocean carriers, through the Ocean Carrier Equipment Management Association (OCEMA), to discuss alternative approaches for the Port to use when collecting the Cargo Facility Charge (CFC).

Since the CFC has already been effectively implemented, questions might arise as to whether or not there is a good economic justification for the Agreement. Regardless of any such questions, the Act and subsequent legislation does not give the Commission the authority to reject an agreement simply because it could lead to inefficiencies, may have a detrimental impact on shippers, or produces other undesirable outcomes. Assuming the Agreement meets all the filing requirements, is clear and definite, and properly fits within the jurisdiction of the Commission, we can only act against such an agreement if it would be likely to, by a reduction in competition, cause an unreasonable increase in transportation costs or decrease in transportation services. We may conclude that the Agreement is unfair, inefficient, even foolish, perhaps, but it is very unlikely unreasonable in the Section 6(g) context.

Considering both the history of the CFC and this Agreement, it appears to me, as one individual Commissioner, that this Agreement is the result of ocean carriers, individually and through OCEMA, bullying a public port authority to enter a discussion agreement in an effort to shift financial responsibility for the CFC away from themselves and on to third parties. The fact that the ocean carriers are using the OCEMA agreement to organize efforts to avoid the CFC does not seem to fit within the purpose of an agreement about "equipment management." In spite of these and other concerns, however, I still do not believe this Agreement is likely to violate Section 6(g) of the Shipping Act, and as such I voted to allow the Agreement to come into effect. The Commission takes the responsibility to monitor all agreements once they take effect very seriously, and I am confident that this Agreement will be no different. I encourage the Commission and other regulators to continue very closely scrutinizing this Agreement, as well as the OCEMA agreement.