FMC will remain vigilant on ocean carrier pricing

In addition to its various efforts to use its investigation as a vehicle to help shippers and carriers improve their business practices and commercial relationships, the Commission will continue its enhanced oversight of the Transpacific Stabilization Agreement and Westbound Transpacific Stabilization Agreement.

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While the Federal Maritime Commission failed to implement any significant reform, it did address ongoing concern over cartel pricing in the transpacific yesterday.

In addition to its various efforts to use its investigation as a vehicle to help shippers and carriers improve their business practices and commercial relationships, the Commission will continue its enhanced oversight of the Transpacific Stabilization Agreement (TSA) and Westbound Transpacific Stabilization Agreement (WTSA).

“I want to personally thank the many U.S. exporters, importers, ocean transportation intermediaries, ocean carriers and other transportation officials who committed their time and resources to this investigation,” said Commissioner Rebecca F. Dye. “We look forward to their continued voluntary participation as we build on the collaborative work conducted under the Fact Finding to strengthen the business relationships between ocean carriers and their customers and increase supply chain reliability.”

Commission staff also will develop recommendations to enhance oversight of the three global alliances.

The findings and recommendations were based on more than 170 interviews with a wide variety of companies and organizations involved in international ocean shipping, a series of “best-practices discussion pairs” between shippers and carriers, and internet-based collaborative efforts concerning solutions to container availability.

Many U.S. exporters and importers participating in the current U.S. Federal Maritime Commission investigation into carrier practices on vessel and equipment capacity and related matters have noted that liner carriers in the U.S. Westbound and Eastbound Pacific trades have charged identical and/or very similar rates and terms for carriage and uniformly applied surcharges.

Among those consulted was Agriculture Transportation Coalition, which told LM earlier this year that carriers had “rolled cargo,” and refused to load cargoes without additional compensation.

“In doing so, carriers often ignore contractual service commitments and prohibitions on the unilateral imposition of surcharges,” said AgTC executive director, Peter Friedmann. “Shipper protests have been largely ignored by carriers, and these disputes are mooted by the need to move the cargo.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
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