The U.S. Federal Maritime Commission (FMC) issued a ruling on February 13, which orders ocean carriers to cease requiring cargo owners and their truckers to use specific chassis on port-to-port shipments. This ruling validates the 2023 chassis choice initial decision, in which Erin Wirth, FMC Chief Administrative Law Judge, determined that exclusive agreements between ocean carriers and chassis providers violates the U.S. Shipping Act of 1984.
The dispute has to do with booking agreements made between cargo owners and ocean carriers. In a door-to-door move, the carrier is responsible for the chassis rental. In a port-to-port move, the cargo owner handles the container’s inland movement and therefore should have a choice on chassis rental.
The FMC ruled in agreement that forcing cargo owners to use specific chassis is in violation of the Shipping Act of 1984 and that giving them the choice of chassis will not impact the flow of cargo. This new ruling will apply to five locations from the initial complaint—the ports of Los Angeles, Long Beach and Savannah, and inland rail ramps in Chicago and Memphis.
“This is a step in the right direction for the FMC to address some unreasonable storage practices at rail terminals,” said Rich Roche, Senior Vice President of Mohawk Global.
“‘Box rules’ have been crippling the flow at certain inland rail terminals for many years. Those terminals will only mount containers on a chassis provided by that ocean carrier’s contracted chassis supplier. At the same time, the terminals also disallow truckers to use their own chassis,” stated Roche. This recent ruling could be a signal that the FMC will continue to monitor and regulate the interpretive rules in both ocean and rail terminals. We will continue to provide updates as changes unfold.
