Regulators: Ocean carrier competition must be preserved

The Federal Maritime Commission will likely meet with European and Chinese shipping regulators on a yearly basis, following recent talks in Brussels.

   There is “clear consensus” among regulators from the U.S., China, and Europe that preserving competition among liner shipping companies as they organize themselves into mega-alliances is a priority, according to FMC Chairman Mario Cordero.
   Cordero met with officials from China’s Ministry of Transport and the European Commission’s Directorate General for Competition earlier this month in Brussels, and there was a commitment by all three groups to continue to meet regularly, probably annually.
   “There is no evidence that there has been a restriction on competition,” said Cordero, who noted the main guidelines the FMC considers when reviewing proposed alliances are whether an alliance will increase cost or reduce service to shippers.
    FMC staff reported at a meeting Wednesday that the 2M Alliance between Maersk Line and Mediterranean Shipping Co. has not hindered competition, and that the agency is committed to continuing to monitor alliances.
   At the summit meeting this month, regulators also discussed port congestion, and how it relates to alliances and mega vessels arriving at large ports.
   The FMC plans to release its report on port congestion on its website in the next few days. That report follows testimony that he and other commissioners it received from the industry during hearings in Los Angeles, Baltimore, Charleston and New Orleans last year.
   Cordero said the report will contain additional information regarding shipper concerns about detention and demurrage charges and that he expects the FMC’s general counsel to provide a memorandum on viable action in the next month that the FMC may take.
   “Myself, I’m inclined to look at that Section 15 order process, but I don’t want to make any preliminary calls,” he said. In April, the FMC released a staff report on detention and demurrage that explained, “Section 15 of the Shipping Act provides the Commission the authority to order common carriers and their employees and agents to report on a matter germane to the Commission’s regulation.”