The Federal Maritime Commission (FMC) of US

 

The Federal Maritime Commission (FMC) of the US government held a separate meeting yesterday (September 16) to discuss what it describes as "market trends in trade lanes serving the US and actions taken by both individual carriers and global alliances in response to Covid-19 and related impacts to the shipping industry”.

Spot rates between Asia and the United States peaked last week at $ 3,711 / FEU on the west coast and $ 4,496 / FEU on the east coast, according to Freightos FBX01 Daily and FBX03 Daily Indexes.

The result is a spike in carrier profits and the miserable peak season for shippers dealing with soaring shipping costs has left all top analysts by surprise.

“If there is any indication of carrier behaviour that might violate the competition standards in section 6(g) of the Shipping Act, the Commission will immediately seek to address these concerns with the carriers” stated the FMC. "If necessary, the FMC will go to federal court to seek an injunction to enjoin further operation of the non-compliant alliance agreement."

With the prospect of a USD 15 billion return during the pandemic, and if it can be sustained for the remainder of 2020, the industry is on track to record the most profitable year.

The Chinese authorities challenged the industry's new pricing power last week and overturned the Chinese carrier COSCO / OOCL's plan to launch another effective GRI, results prevented a seven-week rise in spot rates on the trans-Pacific shipping route.

However, on a sign that carriers are cooperating with the authorities, Taiwan's Evergreen shipping line told Container News: “We are communicating with China’s Ministry of Transport on all matters concerned with its recent inquiries. Evergreen’s pricing strategy is based on its own operating costs and on customer demand. We will always monitor developments in the market and make any necessary adjustments to our freight rates accordingly.”

However, the FMC meeting is another indication that governments are willing to intervene to stop carriers from reaping the fruits of industry consolidation over the past decade. At the same time, the European Competition Administration said it was monitoring the situation.

“We are aware of the investigations conducted in some jurisdictions on liner shipping. The European Commission is monitoring the developments in the sector of liner shipping”, said a spokesman for the European Commission.

Carriers have been able to cope with the challenges of the pandemic and its negative impact on global trade by canceling shipping trains, which has helped match demand with supply on the routes. main shipping.

Trustees received a detailed report on this activity looking at “spot rate trends, long-term service contracts, equipment usage, canceled trains, sales trends, policy of individual carriers and global coalitions on service changes and what notice must be provided to the FMC when ships are not picked up, canceled, or modified ”one person FMC spokesman added.

 

 

Phaata (Adapted from Container-News)