Dive Brief:
- The Ocean Carrier Equipment Management Association and 11 of the largest ocean carriers moved Friday to dismiss a Federal Maritime Commission complaint filed against them by the American Trucking Associations' Intermodal Motor Carrier Conference.
- According to the groups' motion to dismiss, the FMC does not have jurisdiction over the case. It argues that the Shipping Act of 1984 — which the original complaint is based on — is meant to protect shippers, not motor carriers, from "unfair or discriminatory practices."
- "They are devoid of the type of specific facts which entitle them to an assumption of truth and which are necessary to make a claim for relief at least plausible," the motion to dismiss reads, contending the allegations raised in the original complaint.
Dive Insight:
The OCEMA argued in its motion that the IMCC failed to highlight any specific contracts where this is the case and did not show how motor carriers are forced into accepting the overcharging from the chassis providers.
"Again, these are conclusions rather than factual allegations and are not entitled to an assumption of truth," the motion reads.
The IMCC filed the complaint in August, arguing that chassis providers and ocean carriers have limited chassis choice across the country, which results in motor carriers getting overcharged, compared to the rates given to ocean carriers.
Ocean carriers owned 51% of chassis in 2009, but that shrank to 17% by 2013. Ocean carriers don't own any of the chassis in the U.S. today, but have handed over the responsibility to leasing companies or intermodal equipment providers, according to IMCC's original complaint.
But as ocean carriers handed over ownership of chassis, they continued to use the equipment. Ocean carriers often have contracts with shippers that require them to move containers on chassis to their final destination. And the ocean carriers are getting the equipment at a "dramatically" cheaper rate that IMCC Executive Director Tyler Rushforth referred to as a "sweetheart deal" in an interview last month.
The FMC has worked directly on the issue of chassis in the past. Last year, Commissioner Rebecca Dye provided testimony to the Surface Transportation Board that centered on chassis.
In her remarks, Dye said "although carriers have transferred ownership of chassis to IEPs, they still exert significant control over chassis provision — and thus availability — through their contracts with IEPs. That control not only applies to carrier haulage moves, but also can limit provider choice under merchant haulage — even though shippers are billed for chassis use."
But the OCEMA claims the FMC doesn't have jurisdiction, because it is a dispute between ocean carriers and motor carriers, not ocean carriers and shippers.
"The recently published interpretative rule on demurrage and detention focuses on the relationship between ocean carriers and their shipper customers, not motor carriers," the motion reads. "Indeed, the genesis of the interpretative rule was a petition filed by a coalition that involved primarily shippers."
The IMCC will have 15 days following the date of the service of the motion to file its response. The OCEMA will then have seven days to reply to the IMCC response. An administrative law judge within the FMC would make the final decision on the motion.
