Shipex

FMC INVESTIGATION INTO PRACTICES SHIPPING LINES

Maritime regulators – the Federal Maritime Commission (FMC) – have launched a probe into the policies and practices of shipping lines in the ports of New York, Los Angeles and Long Beach.

US exporters of soybeans, cotton, lumber, … had complained about the shortage of containers, and the FMC “will investigate whether shipping lines are impairing the ability of American farmers to reach foreign markets by holding back empty containers”, according to the Wall Street Journal.

 “The Commission is concerned that certain practices of ocean carriers and their marine terminals may be amplifying the negative effect of bottlenecks at these ports”, the FMC stated in a press release.  “The potentially unreasonable practices of carriers and marine terminals present a serious risk to the ability of the US to handle trade growth.”

In Asia, both China and South Korea did intervene already. South Korea’s Ministry of Oceans and Fisheries met with shipping lines a few weeks ago. They made clear that “any reported unjust contract violation or unilateral change in contract terms will be scrutinized and punished”.

Last week Mr Saadé, CEO of French carrier CMA CGM, admitted in an interview with the Financial Times that China had put pressure on the shipping lines.  “The market is so strong that they feel, the Chinese authorities, that at one point in time there needs to be a ceiling”, said Mr Saadé. He added that China is “watching extremely carefully what is happening”. India has outlined plans to regulate freight charges and is updating shipping regulations.

To our knowledge, no investigation has been initiated yet by the European authorities into the current practices of the shipping lines.

In 2016 “commitments by container shipping lines on price transparency” were agreed with former European Commissioner Vestager (in charge of competition policy), but it’s clear that these are not respected by the sector.