This advisory alert is part of an ongoing series from Venable regarding noteworthy developments in trade laws expected in 2025. An introductory preview article is available HERE and an earlier alert about Customs laws and regulations can be found HERE.
Several notable developments are on the horizon for the ocean shipping industry in 2025, which will impact operations across a wide range of stakeholders, including shippers, ocean transportation intermediaries (i.e., non-vessel-operating common carriers and ocean freight forwarders), vessel-operating common carriers, marine terminal operators, and labor. Some of the expected changes have already begun to unfold. We explore a number of these developments below.
- New Leadership at the Federal Maritime Commission. On January 21, 2025, President Trump designated Louis E. Sola to serve as the chairman of the Federal Maritime Commission (FMC or the Commission). This follows after Commissioner Carl Bentzel announced his departure from the Commission in December 2024. We will likely see President Trump nominate a new commissioner to fill the vacancy in the coming year.
- Enforcement Activities. The Commission's Bureau of Enforcement, Investigations and Compliance (BEIC) continues to investigate allegations of noncompliance with the Shipping Act of 1984, as amended most notably by the recent Ocean Shipping Reform Act of 2022 (OSRA 2022), and FMC regulations, with an emphasis on possible misconduct by common carriers or marine terminal operators impacting industry or causing market distortion. Recent FMC regulations regarding demurrage and detention billing requirements and unreasonable refusals to deal or negotiate, which were first implemented under the Biden presidency pursuant to OSRA 2022, will likely continue to be BEIC's enforcement priorities, and we anticipate new enforcement actions and announcements from the FMC in 2025.
- Availability of Class Action Complaints Before the Commission. The FMC, in seeking to level the playing field for shippers and other parties, issued a policy statement on January 2, 2025, clarifying that private parties may bring class actions before the Commission to resolve disputes regarding the Shipping Act of 1984, as amended, and FMC regulations. While there is currently no Commission precedence regarding adjudication of class action complaints, the FMC noted that there is well-established precedence from the federal courts from which to draw guidance. Accordingly, even if Commission enforcement activities are curbed under the new administration, private parties may start taking advantage of the ability to bring class action complaints at the FMC this year.
- Notable Proceedings Before the Administrative Law Judges. We continue to closely monitor certain matters that remain pending before FMC administrative law judges, including those focused on demurrage and detention practices and refusal to honor service contracts. The most notable example is TCW v. Evergreen, which was remanded in July 2024 by the U.S. Court of Appeals for the District of Columbia for further proceedings at the FMC. How the Commission rules on the case may be a litmus test for the Commission's approach and priorities under its new chairman.
- No Port Strike at U.S. East and Gulf Coasts. 2025 began with a tentative agreement between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) in the fight over container automation technology. The compromise reached by the parties is good news for those hoping to avoid major operational disruptions at ports along the U.S. East and Gulf Coasts in Q1 2025.
- Transshipment Risks. In addition to transshipment risks related to evasion of U.S. sanctions and export controls (e.g., use of transshipment points to evade Russia-related restrictions), the ocean transportation industry may see increased tariff evasion in light of the trade proposals from President Trump. U.S. government agencies have reported increased evasion attempts by some Chinese manufacturers, of applicable U.S. tariffs, antidumping or countervailing duties, forced labor bans, and more, by transshipment of merchandise made in China to third countries, including nearby southeast Asian countries such as Malaysia, Thailand, and Vietnam. Over the last few years, for example, U.S. Customs and Border Protection (CBP) has identified various transshipment schemes used to obfuscate the country of origin of imported merchandise.
- Charge Complaint Final Rule. The Commission is expected to initiate the rulemaking process in 2025 implementing a permanent Charge Complaint process. According to FMC's reported data, as of September 30, 2024, the interim process has resulted in common carriers voluntarily waiving or refunding $3,282,928.77 in charges. This process will likely be delayed, however, given the current regulatory freeze implemented by President Trump.
- Additional Rulemakings. The FMC is anticipated to also move forward with several additional rulemakings, including those on shipping exchange registries and the definition of unfair or unjustly discriminatory methods under the U.S. Shipping Act of 1984, as amended. CBP is also anticipated to propose amendments on electronic export manifest information for cargo transported by ocean vessels—specifically those requiring advance submission of the data.
- New Regulatory Requirements for Ocean Shipping Industry Stakeholders. In addition to regulatory developments, stakeholders may be subject to increased obligations under U.S laws and regulations. For example, ocean common carriers of containerized cargo are expected to file documented export strategies with the FMC starting March 1, 2025, on an annual basis.
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Venable's International Trade and Logistics Group is carefully monitoring trade developments, including those impacting the U.S. ocean shipping industry. If you have any questions regarding how these developments may impact your business, please reach out to the authors for guidance.