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FMC launches probe into OSRA 22 carrier compliance

The FMC has launched a probe into how carriers are complying with Section 5 of OSRA 22. Section 5 prohibits retaliation against a company that has raised a complaint. Simply put, Section 5 states that a carrier will not refuse to ship cargo if a shipper raises a complaint.

Florida furniture shipper OJ Commerce alleged that Maersk engaged in such a retaliation. However, Maersk denies the charge.

Shippers have raised concerns about Section 5 regarding how it would be enforced by the FMC. Investigation among the top 20 lines reveals that the FMC may not be entirely certain that OSRA 22 will be enforceable.

FMC chairman Daniel Maffei said the commission would “thoroughly investigate any allegation of illegal behavior and prosecute aggressively when warranted.” He added that all employees of a carrier or MTO should be aware of the consequences of failing to comply with the law.

OSRA 22 may be tested by the OJ Commerce case. The shipper claims Maersk retaliated by refusing to carry its cargo after negotiations for a new contract failed. OJC was forced to use the spot market and its costs increased dramatically.

Maersk claims it had continued to offer spot capacity, which shows it had not retaliated. The carrier also said it had provided evidence of shipping containers. The question for the judge is whether forcing a company onto a much higher spot rate can be construed as retaliation.

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Ocean carriers plan to blank half of sailings from Asia

Ocean carriers are preparing to blank roughly half of their sailings from Asia to North Europe and the US after Chinese New Year on January 22nd. The blankings are due to extremely weak demand forecasts.

High inventory levels in Europe and the US and uncertainty surrounding future consumer demand has led to canceled and postponed orders. Therefore, Chinese factories are preparing to shut down well ahead of the holiday.

Maersk recently said, “More shippers are opting to wait until the holiday period concludes, as stocks shipped earlier in 2022 are already in position to fulfill demand.”

Container spot rates held steady this week. This comes after several consecutive weeks of double-digit decreases. Therefore, it seems as if we reached the bottom.

ONE CEO Jeremy Nixon said he expected short-term rates would remain flat into 2023. He also said, “I think we are effectively on the bottom of those spot market rates.” However, he warned of a “big drop” in exports from Asia after the Chinese New Year and a “very soft” February and March.”

The trans-Atlantic tradelane remains an outlier. North Europe to US East Coast short-term rates are still three times higher than before the pandemic. However, these rates might nosedive due to a 43% YoY injection of capacity into the route.

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About O’Neill Logistics

O’Neill Logistics is a leading third party logistics provider. We operate in California, Savannah, New Jersey. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.

O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.

Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.

Please reach out to us if you have any questions or need assistance with your logistics solutions!