Intermodal motor carriers officially settle with ocean carrier

user-gravatar Headshot

The Federal Maritime Commission has approved a settlement negotiated between the American Trucking Associations’ Intermodal Motor Carriers Conference and an FMC-regulated ocean carrier. The ocean carrier, Sinotrans Container Lines Co., had prevented an IMCC member trucking company from conducting intermodal business with its customers and with Sinotrans.

FMC’s validation of the settlement, approved by an administrative law judge last month, marks the first time that violations of intermodal motor carrier contract rights have been recognized and enforced by the FMC.

The FMC also dismissed a last-minute petition to intervene and block the settlement filed by the Ocean Carrier Equipment Management Association, ruling that the association had presented no grounds for review. OCEMA was attempting to challenge the commission’s jurisdiction to hear disputes regarding interchange contracts between intermodal motor carriers and ocean carrier-equipment providers under the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA).

“We’re pleased that the FMC accepted jurisdiction over this dispute in approving the settlement,” says Bill Graves, ATA president and chief executive officer. “This decision gives intermodal motor carriers a new and powerful avenue for protecting the rights, risks and obligations of motor carriers operating in the intermodal container logistics network.”

IMCC in October filed a complaint on behalf of Transport Express Inc., alleging that Sinotrans Container Lines Co. Ltd/Sinotrans Shipping Agency Inc. wrongfully terminated Transport Express’ interchange rights, which are necessary to conduct intermodal container transport under the UIIA. The parties subsequently filed a settlement in November in which Sinotrans agreed to reinstate Transport Express’s interchange rights, pay damages and not terminate any motor carrier’s UIIA interchange rights in circumstances similar to those raised in this case.

FMC’s ruling upheld IMCC’s assertion that Sinotrans’ actions violated provisions of the UIIA and also violated Section 10 fairness provisions of the Shipping Act of 1984, which prohibit an ocean freight carrier from unreasonably refusing to deal or negotiate, and require ocean carriers to observe just and reasonable regulations and practices relating to the movement and transfer of intermodal containers and property.