Federal Maritime Commission Chairman Mario Cordero said he is hoping for a favorable response from regulators in the Europe and China to his call for a global regulatory summit on the proposed P3 Network of the world’s three largest container carriers — Maersk Line, CMA-CGM and MSC — on the major east-west trade lanes.
Elaborating on a proposal he unveiled Monday to meet with regulators from China’s Ministry of Transport and the European Union, Cordero told American Shipper, “I think it’s an opportunity for the FMC to reach out to our fellow regulators … so we can better understand our respective roles.
“My call for a global summit should, by no means, be interpreted that we are going to jump the gun with regard to the formal commenting period that will come once the agreement is filed. At that point, we will look at the specific commentary whether it would come from a shipper organization or others,” he said.
“I want to make sure that I respect the process,” he continued. “Once the P3 alliance does file an agreement, then there will be a process for that. I want to make sure that process is intact as it is designed.”
Cordero said he intends to be “very open minded” about the P3 proposal, noting that while the carriers met with the FMC around the time it was announced publicly to give the agency a “heads up,” it has not yet received a formal agreement; he has gotten his information from press accounts and has not formed an opinion about P3.
He said while the majority of top 20 carriers are in alliances, the P3 is unique because it involves the three largest container shipping companies and because of the magnitude of the agreement — 240 vessels and 2.6 million TEU.
Though he has had no conversations with the carriers about when they plan to file the P3 agreement, he said his staff expects that it will be “fairly soon, and, for sure, by the end of the year,” which he said should give the FMC time to review it by the second quarter of 2014 — when the three carriers said they would like to start up the P3.
Cordero said he is interested in looking at the P3 both in terms of the capacity it will control and the impact on ports, referencing the eight years he served as a member of the Board of Harbor Commissioners for the Port of Long Beach.
Cordero said Monday that once the P3 agreement is filed, he expects to allow all segments of the maritime industry, including shippers, “to fully express their views to the commission in written comments or open hearings as to how this alliance of foreign flag carriers would affect our waterborne commerce.”
He elaborated on Tuesday, saying that while open hearings might be ideal “in the spirit of transparency,” that desire must be weighed against the fact that “these filings are made under the auspices of antitrust immunity; they are confidential filings and I have to be sensitive to that.”
Cordero continued, saying, “If an open hearing is possible … without breaching the confidentiality aspects of a filling, then, of course, I will take a serious look at that on the advice of counsel.”
Cordero said the FMC will consider the P3 Alliance under 6(g) of the Shipping Act of 1984, which authorized the commission to seek an injunction against substantially anticompetitive agreements because they produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost.
In addition to P3, in an interview with American Shipper, he discussed some other major issues:
- The FMC’s review of existing Ocean Transportation Intermediary rules: “It’s been a hotly contested issue, but I’m very comfortable that our review of the existing rules is not because we are going down the road of burdensome regulation.” He said he feels optimistic about working with the OTI industry “to come to common ground.”
- Pier Pass and traffic mitigation fees at the Ports of Los Angeles and Long Beach: He noted the FMC has not received any formal complaints, but that at a “study session” over a year ago, the commission heard of concerns about traffic mitigation fees in the two ports and whether they will continue to increase. “Trade begins at the ports,” he said, adding that the FMC has to work with ports and terminal operators to make sure they remain competitive.
- The Harbor Maintenance Fee: Noting that the FMC had looked at the Harbor Maintenance Fee when it examined the “diversion” of cargo through Canadian ports, he said he was pleased that Congress is looking at the issue. He said that while Congress is the body to decide what is the best approach, he said he was pleased that they were looking at seeing that money collected by the fee and put in the Harbor Maintenance Trust Fund is fully used for ports, as well as the possibility that “donor ports” that have naturally deep harbors or require little dredging might be able to receive some money, and that the funds might be used for purposes other than maintenance dredging (such as environmental mitigation).
