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GAO-20-353R 1 (2020-01-31)

handle is hein.gao/gaobaeaob0001 and id is 1 raw text is: G A O U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 January 31, 2020 The Honorable Roger Wicker Chairman The Honorable Maria Cantwell Ranking Member Committee on Commerce, Science, and Transportation United States Senate The Honorable Peter A DeFazio Chairman The Honorable Sam Graves Ranking Member Committee on Transportation and Infrastructure House of Representatives Ocean Carrier Bankruptcies: Federal Agencies Have a Limited Role in Addressing the Effects on Cargo Ocean shipping is an important part of the U.S. economy, supporting the trade of cargo into and out of the United States from all over the world. The Federal Maritime Commission (FMC) oversees ocean common carriers in the ocean liner trade that provide service to and from the United States and, according to FMC, works to ensure a competitive and reliable ocean- transportation supply system.1 According to FMC, more than $1 trillion in U.S. exports and imports are moved by ocean vessels annually.2 In August 2016, South Korea's Hanjin Shipping (Hanjin) filed for bankruptcy protection after 4 consecutive years of financial losses. Hanjin-at the time the seventh largest ocean carrier in the world-subsequently halted the movement of its vessels and failed to meet many of its cargo delivery and payment obligations.3 These actions affected the movement of cargo into and out of the United States. 1 In general, an ocean common carrier operates, for all or part of its service, vessels on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, providing transportation by water of passengers or cargo for compensation to the general public. 46 C.F.R. § 535.104(0, (u). Much of this ocean cargo is transported in containers, which are large steel boxes that can be transferred from vessels to other transportation modes such as railcars and trucks. 2 FMC, Fiscal Year 2020 Budget Justification (March 2019). 3 According to FMC officials, Hanjin's financial difficulties were widely known and the surprise was the precipitousness of the withdrawl of financial support for Hanjin by a Korean state-sponsored bank. GAO-20-353R Ocean Carrier Bankruptcies Page 1

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