Subscribe to our free, weekly email newsletter!

Ocean cargo/global logistics: FMC Scrutinizes Carrier Rates and Capacity

By Patrick Burnson, Executive Editor
June 01, 2010

As the Federal Maritime Commission ramps up its investigation of ocean carrier price-fixing, it is also keeping a vigilant watch on capacity and equipment shortages.
In a speech given before the Virginia Maritime Association last month, FMC commissioner Michael Khouri noted that U.S. exporters of agricultural products are particularly exercised about the impact of capacity limitation, equipment unavailability and rate increases on their ability to compete internationally.

“The capacity, equipment availability and rate increase issues and their impact on U.S. shippers are of great concern to the FMC,” said Khouri. “Last March, the Commissioners voted to initiate a Non-Adjudicatory Fact Finding Investigation into the current conditions concerning vessel and equipment availability in the U.S. export and import liner trades.”

Meanwhile, Khouri and his colleagues are concentrating on rate inflation too.

“Recent reports of increases in annual transpacific contract rates have heightened shipper concerns that these rate hikes are facilitated by carriers using, first, their legal authority to discuss voluntary general rate guidelines with, second, discussions to agree on capacity restriction,” he said. “The first discussion would be legal under the Shipping Act. The second discussions — if they occurred — would be outside of the Shipping Act purview and would therefore be a violation of the Sherman Act.”
While the FMC’s Fact Finding is not focused on the vessel operator’s antitrust immunity, the Commission is mindful of these concerns and plans to closely monitor the carriers’ collective activities. If there is any indication that capacity issues and higher freight rates are credibly linked to any improper use of antitrust immunity by foreign-flag or U.S. flag liner carriers, the Commission will take action, said Khouri. He said shippers may also see renewed attention by Congress and the Administration.

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 .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The United States Environmental Protection Agency (EPA) has awarded the Port of Oakland $277,885 to upgrade cargo-handling equipment and reduce exhaust emissions on the waterfront.

Entitled the Positive Train Control Enforcement and Implementation Act of 2015, the bill would extend the 2015 PTC implementation deadline to the end of 2018.

Carloads were down 5.4 percent annually to 285,856, and intermodal was up 2.1 percent to 280,844.

Did you know that there is a correlation between logistics solutions and customer loyalty? 70% of customers are willing to spend more money for good customer service which means you must have on-time delivery, proficient inventory management and a strong logistics strategy.

While coffee is one of the first things on the minds of many people early in the morning, it was especially prevalent this week, when Starbucks Chairman and CEO Howard Schultz gave the keynote address at this week’s Council of Supply Chain Management Professionals (CSCMP) Annual Conference in San Diego.

Article Topics

News · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA