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FMC warns of court action if there are signs of 'collusion' on transpacific trade

US ocean regulator the Federal Maritime Commission (FMC) has fired a warning shot across the bows of container shipping lines, saying it will head to the courts if there is evidence of collusion on the transpacific trades

22 September 2020 - 19:00

US ocean regulator the Federal Maritime Commission (FMC) has fired a warning shot across the bows of container shipping lines, saying it will head to the courts if there is evidence of collusion on the transpacific trades.

Freight rates between Asia and the east and west coast of the US have reached record highs in recent months and, following a closed meeting of FMC commissioners, the regulator said it was looking into possible infringements of competition law.



'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.



'If necessary, the FMC will go to federal court to seek an injunction to enjoin further operation of the non-compliant alliance agreement', it said, adding that it had 'heightened its scrutiny of markets, individual ocean carriers, and the three global carrier alliances in response to the unusual circumstances and challenges created by the Covid-19 pandemic'.



The FMS said it had received 'detailed reports that addressed trends in spot rates, longer-term service contracts, utilisation of equipment, blanked sailings, revenue trends, the policies of individual carriers and global alliances for service changes, as well as what notice must be provided to the FMC when there are blanked, cancelled or amended voyages.



'The FMC is actively monitoring for any potential effect on freight rates and transport service levels, using a variety of sources and markers, including the exhaustive information that parties to a carrier agreement must file with the agency,' it added.



While carriers have continued to restrict capacity, the transpacific trade has seen a surge in demand over the summer.



Hackett Associates' Global Port Tracker recorded US ports handling 1.92 million TEU in July, which although being down 2.3 per cent year on year, was up 19.3 per cent on June, 'and significantly higher than the 1.76 million TEU forecast a month ago'.



And it currently forecasts August's throughput at 2.06 million TEU, which would be 6 per cent higher than August last year and represent the highest monthly throughput on record, 'beating the previous record of 2.04 million TEU set in October 2018'.



Data from the port of Los Angeles supports this - it said this week that August container throughput was its highest ever, at 961,833 TEU, which was up 12 per cent year on year, and saw loaded imports breach the 500,000 TEU mark for the first time, reports UK's The Loadstar.



Meanwhile headhaul spot rates continue at historic highs. However, it appears carriers have begun to heed the recent warning from the FMC and China's ministry of transport. Cosco Shipping and OOCL suspended planned September 15 GRIs on the eastbound transpacific trade while other major container lines were reported to be pushing forward with GRIs that are slightly lower than they had announced.


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