RELO Roundtable…a gathering place

The Federal Maritime Commission (FMC), the independent federal  agency responsible for regulating international ocean transportation in the U.S., approved a number of new recommendations at its meeting on December 8, 2010. These important new consumer protection items were contained in the Interim Report for Fact Finding Investigation No. 27, as presented by Commissioner Michael A. Khouri. 

The Commission first initiated this non-adjudicatory investigation on June 23, 2010, to develop a record on the nature, scope and frequency of potentially unfair, unlawful or deceptive practices in the shipping of household goods or personal property within the FMC's jurisdiction. Commissioner Khouri, the Fact Finding Officer, presented the team's preliminary observations and conclusions about the nature and scope of the problem, recommendations for immediate action, and topics for further development.

Each year, the FMC receives a substantial number of complaints from individuals who have experienced various problems with their international household goods shipment. Between 2005 and 2009, the Commission received over 2,500 such consumer complaints related to household goods moving companies transporting personal effects and vehicles between various locations in the United States and foreign destinations.

Typical complaints involve:

• allege failure to deliver the cargo and refusal to return the pre-paid ocean freight
• loss of the cargo
• significant delay in delivery
• charges to the shipper for marine insurance that was never obtained
• misinformation as to the whereabouts of the cargo
• significantly inflated charges after the cargo was tendered and threats to withhold the shipment unless the increased freight was paid; or,
• failure to pay the common carrier engaged by the company as another intermediary

In many cases, a inexperienced shippers have been forced to pay another carrier or warehouse a second time in order to have their cargo released.

During the first phase of their fact finding the FMC interviewed individual shippers, ocean transportation intermediaries (OTIs), local and national trade associations representing OTIs and household goods movers, vessel operating common carriers, and other government agencies.

Using interviews and meetings conducted in Washington, DC, New York, NY, Miami, FL, and San Diego, CA, the fact finding team identified two distinct and separate cargo trades:

1. The international movement of household goods for relocation by individuals who use the internet to find a moving service or the "internet-based market"; and
2. The "barrel trade" where individuals — primarily from various local communities — send small shipments of personal goods to relatives or friends in their home countries in Latin America and the Caribbean Basin on a semi-regular basis.

Commissioner Khouri presented the following recommendations for immediate action, which were approved by the Commission:

Consumer Education:

• Further develop the Commission’s website content to assist consumers as they choose international shipping options;
• Formalize cooperation with other governmental agencies in the household goods area;
• Enhance cooperation with trade associations representing household goods movers;
• Develop informational documents tailored to household goods consumers for use and distribution by OTIs;
• Target outreach to local communities that regularly ship household goods overseas;
• Develop an advisory asking that licensed OTIs link their websites to the FMC’s website; and
• Encourage internet-based "lead source providers" to link their website to the FMC website and check the license status of mover clients.

Industry "Best Practices" and Model Forms:

• Engage with industry groups and consumers to develop a set of "best practices" and model shipping forms that address consumer issues raised by the Fact Finding; and
• Develop an advisory for Commission consideration that would recommend the use of these practices and forms to licensed OTIs in the household goods business.

Licensing Issues:

• Prepare recommendations specifically related to the movement of household goods for inclusion in any draft regulation developed by the Commission working group currently considering changes to existing licensing rules and regulations for OTIs.

Enforcement:

• Develop guidelines and procedures to facilitate and implement joint law enforcement efforts to protect consumers and address problem household movers; and
• Develop an agency enforcement strategy focused on entities offering services related to the transportation of household goods in U.S. – foreign container trades.

Alternative Dispute Resolution (ADR):

• Promote alternative dispute resolution services provided by the Commission which assist consumers experiencing problems with household goods movements.

Additional options will be developed for consideration by the Commission during the second phase of the investigation and will be addressed in the February 15, 2011 Final Report.

Related Articles:

How to Choose an International Mover – RELO Roundtable

Interim Report for Fact Finding Investigation No. 27 – Federal Maritime Commission