Federal Maritime Commission: Improved Use of Data on Shippers' Complaints Could Enhance Oversight
Fast Facts
During COVID-19, high demand for cargo space disrupted the maritime shipping industry. Some companies that ship hazardous items raised concerns that ship operators prioritized consumer goods over their cargo, which is often less valuable.
The Federal Maritime Commission investigates complaints about shipping practices. We found:
Hazmat companies rarely filed complaints, partially due to not understanding the complaint process
FMC doesn't collect specific data on its complaint forms—e.g., if cargo is hazardous—that would help it identify industry trends
We recommended that FMC improve its outreach and data collection for its complaint process.
Highlights
What GAO Found
The COVID-19 pandemic disrupted the maritime shipping industry, causing congested ports, high demand for cargo space on ships, and volatile shipping rates. Selected shippers of hazardous materials (hazmat), which include chemicals and other types of cargo critical to the U.S. economy, told GAO they were particularly affected during the peak of the pandemic (2020 through 2022). All six hazmat shippers GAO interviewed said they had difficulty securing space on ships, and five said they experienced long delays. Shippers attributed these challenges to safety risks and additional requirements associated with hazmat, which made it less desirable for carriers to accommodate on their ships.
GAO found that while hazmat imports and exports increased from 2018 through 2020, hazmat imports stagnated and exports decreased from 2020 through 2022. Hazmat imports increased almost 32 percent from 2018 through 2020, but grew less than 1 percent afterward. Hazmat exports increased 19 percent from 2018 through 2020 and declined by 7 percent afterward. Conversely, non-hazmat imports and exports grew at a higher rate during the pandemic, which carriers attributed to non-hazmat shippers paying higher shipping rates.
Hazardous Materials Imports and Exports Transported on Cargo Ships in Twenty-Foot Equivalent Units, 2018–2022
The Federal Maritime Commission (FMC) is responsible for ensuring a competitive and reliable ocean transportation system for all U.S. shippers. Its oversight efforts include receiving complaints from shippers about carriers. FMC can use this information to respond to shippers' concerns and initiate investigations of carriers. However, GAO found several shortcomings in how FMC collects, manages, and uses complaint data: (1) FMC does not consistently capture certain details—such as type of cargo, whether cargo is hazmat, and incident location—which limits FMC's ability to analyze complaint trends; and (2) key FMC procedures for managing the data are out of date and incomplete. GAO also found that while FMC plans to modernize how it collects, manages, and uses information from complaints, it lacks a strategy to guide these efforts. Such a strategy could include key information on planned updates, such as goals, required investments, and expected outcomes. Taking steps to address these shortcomings and developing a data strategy could help FMC more effectively use data to oversee the maritime shipping industry.
Why GAO Did This Study
The maritime shipping industry is vital to the global economy and accounted for $2.3 trillion in U.S. trade in 2022. FMC is responsible for overseeing this industry, including protecting U.S. shippers from unfair or unjustly discriminatory practices related to securing vessel space.
The Ocean Shipping Reform Act of 2022 includes a provision for GAO to examine whether carriers disadvantaged shippers of hazmat during the pandemic through the systemic and unreasonable denial of vessel space or other means. This report examines, among other things: (1) shippers' experiences transporting hazmat during the pandemic; (2) how the amount of hazmat imports and exports changed from 2018 through 2022 (the most recent data available at the time of GAO's review); and (3) actions FMC has taken to collect, manage, and use its complaint data.
For these objectives, GAO reviewed pertinent FMC regulations and policies; analyzed trade data; visited two ports; and interviewed FMC officials as well as representatives of six shippers and five carriers. GAO selected these shippers and carriers based on a review of recent FMC rulemakings and on stakeholders' recommendations.
Recommendations
GAO is making four recommendations to FMC, including that it review the information it collects on certain complaints, update its procedures for managing complaint data, and develop a data strategy to guide future efforts. FMC neither agreed nor disagreed with GAO's recommendations, but identified actions it plans to take. GAO stands by its recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Federal Maritime Commission | The Chairman of the Federal Maritime Commission should develop an outreach plan for communicating information about FMC's various complaint processes to shippers. Such a plan should align with leading practices for effective outreach. (Recommendation 1) |
In its written response to this report, FMC neither agreed nor disagreed with this recommendation. FMC acknowledged the importance of outreach and described initiatives it had undertaken, which we summarized in our report. However, we found that FMC did not have a documented plan for these efforts that defined its outreach goals, analyzed any gaps in knowledge among its stakeholder groups, or determined appropriate messages to address those gaps. In addition, in 2022 FMC issued its own study which reported that shippers were generally unfamiliar with FMC's complaint mechanisms and had difficulty discerning the differences between the mechanisms. Our report confirmed these findings. Developing an outreach plan could help FMC refine its outreach efforts to determine which industry events are best suited to reach target audiences and establish relevant goals or performance measures to assess whether messages are reaching the intended audience, among other things. As such, we stand by our recommendation and believe that FMC should implement it. We will monitor and report on FMC's actions to address this recommendation.
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| Federal Maritime Commission | The Chairman of the Federal Maritime Commission should review the CADRS complaint form to ensure it is collecting specific information on shippers' challenges. (Recommendation 2) |
In its written response to this report, FMC neither agreed nor disagreed with this recommendation. As noted in our report, FMC has not updated the CADRS form since 2019, prior to the enactment of the Ocean Shipping Reform Act of 2022, which codified CADRS in statute and directed FMC to appoint additional staff to assist with investigations. Given that FMC noted in its comments that it is receiving more complaints than in years past, we believe that collecting more specific information on the form is even more important to effectively monitor and respond to concerns in the maritime industry. We will monitor and report on FMC's actions to address this recommendation.
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| Federal Maritime Commission | The Chairman of the Federal Maritime Commission should update the procedures for FMC's CADRS and BEIC offices to ensure they include all actions staff can take in response to shippers' concerns, such as analyzing complaint data, and establish requirements for future reviews and updates. (Recommendation 3) |
In its written response to our report, FMC neither agreed nor disagreed with this recommendation. In our report, we found that FMC's procedures for the CADRS and BEIC offices did not reflect the full range of actions that staff can take to manage and use data from CADRS cases. By updating its procedures to include all actions staff can take in response to shippers' concerns, including handling potential violations of the Shipping Act, FMC will have greater assurance that its staff are consistently following its procedures. Establishing requirements for future updates to these procedures could also improve FMC's ability to monitor and respond to shippers' challenges in the future. Therefore, we believe that FMC should implement our recommendation and we will monitor FMC's efforts to do so.
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| Federal Maritime Commission | The Chairman of the Federal Maritime Commission should develop a strategy to guide FMC's efforts to modernize how it collects and manages data such that FMC can better monitor shippers' challenges and trends in the maritime shipping industry. (Recommendation 4) |
In its written response to our report, FMC neither agreed nor disagreed with this recommendation. FMC's written response stated that it is taking action to modernize its data processes using its information technology modernization plan. However, FMC did not provide us with this plan, nor did officials mention such a plan in our interviews. As a result, we cannot verify that the plan encompasses planned updates to the CADRS or BEIC data. We also cannot verify that the plan includes key information identified in leading practices-such as goals and intended outcomes, planned actions and investments, and plans to measure effectiveness. As we note in our report, having such information can help FMC ensure that it implements its modernization efforts efficiently and effectively and help guide future decisions related to how FMC collects and manages data. In its comments, FMC also stated that its new Chief Information Officer (CIO) will help the agency take more significant strides toward its information technology modernization goals. We look forward to working with the new CIO to implement this recommendation and will monitor FMC's efforts to do so.
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