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Update Regarding Commission Briefings on the Status of Hanjin Shipping

Posted
September 22, 2016
NR 16-19

Contacts: John K. DeCrosta, 202-523-5911

The status of Hanjin Shipping and the disruptions caused by its bankruptcy to the American shipping community, as well as global supply chains, was examined closely by the Federal Maritime Commission during the closed session of the September 20, 2016 public meeting.

Commissioners were briefed by staff from the Office of the General Counsel; the Bureau of Trade Analysis; the Bureau of Enforcement; and the Office of Consumer Affairs & Dispute Resolution Services about a variety of developments related to the insolvency of Hanjin Shipping. Topics addressed included: proceedings in the U.S. Bankruptcy Court for the District of New Jersey and rulings made by the judge in this case; a briefing on the overall situation shippers are facing; complaints received by the Commission over the past two weeks, including Congressional inquiries; the availability of intermodal equipment, including chassis; and outreach efforts by the Commission to shippers and Ocean Transportation Intermediaries impacted by Hanjin Shipping’s change in its operating status.

“Hanjin Shipping was one of the world’s largest container carriers and its market share serving the United States approached ten percent. Their insolvency unquestionably has had an impact on the shipping public as we approach the height of peak season,” noted Federal Maritime Commission Chairman Mario Cordero. “The Commission has been diligent in engaging its constituencies, staying informed regarding developments related to this bankruptcy, and being vigilant in guarding against any potential violations of the Shipping Act. Today’s previously scheduled meeting provided a timely forum to delve into the many issues manifesting themselves as a result of Hanjin Shipping essentially ceasing its operations.”

The U.S. Bankruptcy Court for the District of New Jersey has primary jurisdiction in this matter domestically. The Federal Maritime Commission has the responsibility to investigate any potential violations of the Shipping Act, which governs the business practices of marine terminal operators.

Over the past two weeks, the Commission has received numerous inquiries related to fees being charged by marine terminal operators (MTOs) to beneficial cargo owners to secure the release of their shipments. The Commission understands the concerns the shipping public has regarding the appropriateness and amounts of these fees. Any allegations of unreasonable practices or violations of the Shipping Act by MTOs will be examined carefully by the Commission.

Discussion regarding the Hanjin Shipping bankruptcy, as well as a briefing on the Maersk-MSC (“2M”) alliance were held in a closed session of the Commission meeting. During the open session of the meeting, Commissioners were briefed on the recently concluded US-Japan Maritime Bilateral Discussions that were held in Washington, DC; and, the Foreign-based Non-Vessel Operating Common Carrier (NVOCC) Registration Renewal Process.

The Federal Maritime Commission is responsible for regulating the Nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The Commission’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.