Federal Maritime Commission

Type: Government Agency
On the web: http://www.fmc.gov

If your business does business by water, you've probably heard of the Federal Maritime Commission. In support of its mission to protect maritime commerce and create a fair, secure, and efficient system, the FMC oversees ocean carriers, marine terminal operators, ports, and ocean transport intermediaries and the financial responsibilities of passenger ships. It also helps resolve disputes as well as monitors and enforces shipping regulations, laws and practices of foreign governments, and special regulations for foreign-owned shipping carriers. The FMC was established in 1920 and became an independent regulatory agency in 1961.

Officers:
Acting Secretary: Karen V. Gregory
Director, Office of Administration: Peter J. King
Director, Office of Financial Management: Karon E. Douglass

Maritime Commission, Federal, a regulatory agency charged with protecting the interests of shippers, carriers, and passengers sailing under the U.S. flag. The Commission investigates anticompetitive practices in the maritime transport business and reviews the records of service contracts and rates. It issues licenses to ocean transportation intermediaries to guard against unqualified, insolvent, or dishonest companies; requires companies to maintain bonds against financial loss; and ensures that passenger cruise operations take financial responsibility when found liable for personal injury, death, or nonperformance of a voyage.

Today's Federal Maritime Commission is a fragment of a once huge network of government agencies created by legislation including the Shipping Act of 1916 and the Merchant Marine Acts of 1920 and 1936. On the eve of World War I, with American ships carrying only 2 percent of the nation's foreign trade, policymakers moved to reverse the nation's vulnerability to shortages in vital supplies. With the help of massive government subsidies, by the end of world War II the United States had one of the largest maritime fleets in the world and U.S. merchant ships carried 60 percent of the world's tonnage.

In the decades after the war, U.S.-flagged shipping began a continuing decline as air traffic took over passenger service previously provided by ocean liners, containerization technology made managing cargo more efficient, and U.S.-owned ships transferred registration to foreign countries such as Liberia to avoid higher costs associated with U.S. regulation.

In 1950 the U.S. Maritime Commission, which had presided over the fleet's buildup, was dismantled and its responsibilities shifted to the Maritime Administration and the Federal Maritime Board. In 1961 the Board was renamed the Federal Maritime Commission and its non-regulatory responsibilities were given to the Maritime Administration. Regulatory provisions of the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 reflect the recent era of diminished government involvement in the ocean transportation industry.

Bibliography

Federal Maritime Commission. 39th Annual Report for Fiscal Year2000. Washington, D.C.: Federal Maritime Commission, 2001.

Labaree, Benjamin W., et al. America and the Sea: A MaritimeHistory. Mystic, Conn.: Mystic Seaport Museum, 1998.

The Federal Maritime Commission (FMC) regulates the waterborne foreign and domestic offshore commerce of the United States; ensures that U.S. international trade is open to all nations on fair and equitable terms; and protects against unauthorized activity in the waterborne commerce of the United States. The FMC reviews agreements made by groups of common carriers (those who operate ships for commercial purposes), ensures that carriers charge rates on file with the FMC, and guarantees equal treatment to carriers and those who ship their goods. The FMC also ensures that adequate levels of financial responsibility are maintained for the indemnification of passengers who sail on commercial passenger ships.

The FMC was established by Reorganization Plan No. 7 of 1961 (5 U.S.C.A. app.), effective August 12, 1961. It is an independent agency that regulates shipping under the following statutes: the Shipping Act of 1984 (46 U.S.C.A. app. at 1701-1720); the Shipping Act, 1916; the Merchant Marine Act, 1920; the Foreign Shipping Practices Act of 1988 (46 U.S.C.A. app. at 1710a); the Intercoastal Shipping Act, 1933 (46 U.S.C.A. app. at 843 et seq.); and certain provisions of the Act of November 6, 1966 (46 U.S.C.A. app. at 817(d), 871(e)).

The commission reviews agreements made by common carriers, terminal operators (those who operate the docking facilities in harbors), and other persons subject to the shipping statutes. The FMC also monitors activities under all effective or approved agreements, for compliance with the provisions of the law and its rules, orders, and regulations.

The FMC accepts or rejects tariff filings, including filings dealing with service contracts, of common carriers engaged in foreign and domestic offshore commerce of the United States, or conferences of such carriers. The FMC regulates the rate of return of carriers in domestic offshore trades. It has the authority to grant exemptions from tariff requirements.

The commission issues licenses to persons, partnerships, corporations, and associations desiring to engage in ocean freight forwarding activities. Shipowners and the operators of passenger ships that carry more than fifty passengers are required to obtain certificates from the FMC that demonstrate that they have the financial resources and responsibility to pay judgments for personal injury or death, or to refund fares in the event that voyages are canceled.

When a violation of the shipping laws is alleged or suspected, the FMC is authorized to investigate and may take administrative action to start formal proceedings, to refer matters to other government agencies, or to bring about voluntary agreement between the parties. It may also conduct formal investigations and hearings on its own motion and may adjudicate formal complaints.

The FMC promulgates rules and regulations to interpret, enforce, and ensure compliance with shipping and related statutes by common carriers and other persons subject to those statutes.

The staff of the FMC administers programs to ensure compliance with the provisions of the shipping statutes. These programs include the submission of information, and field investigations and audits of activities and practices of common carriers, terminal operators, and others subject to the shipping statutes. The FMC also conducts rate analyses, studies, and economic reviews of current and future trade conditions, including the extent and nature of competition in various trade areas.

The FMC conducts investigations of practices by foreign governments and foreign carriers that adversely affect the U.S. shipping trade. The commission works with the Department of State to eliminate discriminatory practices on the part of foreign governments against U.S.-flag shipping and to promote fairness between the United States and its trading partners.

The commission comprises a chairman and four commissioners, who are appointed by the president.