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Section 15 Order to VOCCs: Commissioner Doyle supports robust monitoring of Pacific Port Operational Improvement Agreement; FMC issues U.S. Container Port Congestion and Related International Supply Chain Issues: Causes, Consequences and Challenges.

July 16, 2015

The Pacific Ports Operational Improvements Agreement (PPOIA) was filed with the Commission on March 3, 2015, and went into effect on April 17, 2015. The purpose of the Agreement is to allow for discussion and the exchange of information between the parties, both carriers and marine terminal operators, to reduce port congestion and enhance efficiency on the West Coast.

Prior to the Agreement going into effect, I reviewed the comments submitted by the public and listened to those who expressed concerns about the Agreement. As a result of discussions with the FMC, the parties agreed to narrow the scope of the Agreement to minimize possible anticompetitive effects, while still maintaining a cooperative effort to reduce port congestion.

The Commission closely monitors the activities of all agreements to identify emerging 6(g) (anticompetitive) concerns and to act quickly should it become necessary to resolve any concerns. FMC staff has requested certain information from the parties to the PPOIA. To date, the response by the PPOIA parties has been incomplete. As a Commissioner, I am interested in receiving relevant information, including but not limited to service agreements between the vessel operating common carriers (VOCCs) and the marine terminal operators, as well as information related to chassis operations.

By not producing the requested information, the PPOIA parties are impeding the Commission’s responsibility to properly evaluate and monitor the Agreement. We do not take our hands off the wheel just because an agreement is allowed to go into effect.

At the June 2015 Commission meeting, I voted in favor of directing FMC staff to prepare for consideration and approval of an order to require the ocean carrier members of the PPOIA agreement to submit certain data and information relevant to the Commission’s oversight responsibilities and further assessment of the competitive impact of the agreement. That vote was unanimous.

As a result of that directive, staff drafted a Section 15 Order to compel certain information, which I also voted to support. This Section 15 Order vote was also unanimous.

Section 15 of the Shipping Act, codified at 46 U.S.C. § 40104, provides the Commission with the authority to order common carriers and their employees and agents to report on matters germane to the business of the carrier. The authority of the Commission to use such orders to gather information is broad and has been used in the past to gather information on a variety of policies. The Section 15 Order can be found at: http://www.fmc.gov/assets/1/Documents/PPOIA%20Section%2015%20Order.pdf

To be clear, I strongly support allowing all stakeholders to meet and discuss port congestion within the framework of the Shipping Act, and to find solutions to help alleviate and ultimately prevent future congestion.

In other Commission action, the Commission unanimously voted to send the PPOIA parties a Request for Additional Information (RFAI), meaning a delay in the implementation of an amendment that would add three additional parties to the PPOIA agreement by stopping the 45-day clock.

Separately, the Commission issued a report entitled U.S. Container Port Congestion and Related International Supply Chain Issues: Causes, Consequences and Challenges. That report can be found at: http://www.fmc.gov/NR15-11/. This report is a synopsis of stakeholder viewpoints expressed at the port congestion forums held by the Commission in the fall of 2014. The report highlights six major themes discussed – investment and planning; chassis availability and related issues; vessel and terminal operations; port drayage and truck turn-time; extended gate hours, PierPASS and congestion pricing; and collaboration and communication.

Congestion and inefficiency in our ports do not square with a fair, efficient and reliable international ocean transportation system. I applaud all efforts to innovate and speed the flow of goods in and out of the United States. But all such efforts must also protect importers, exporters and the American consumer.