Federal regulators are increasing their monitoring of ocean carriers by requiring them to report more detailed price and capacity data in order to protect against anti-competitive rates and services.
The Federal Maritime Commission announced on Thursday that the three global carrier alliances that dominate global shipping (2M, Ocean, and THE), as well as the ten-member companies that comprise them, will now be required to provide “uniform data to use in assessing ocean carrier behavior and marketplace competitiveness.”
The new data will provide insight into the price of individual trade channels by container and service type to FMCs’ Bureau of Trade Analysis (BTA).
“The adjustments are the outcome of a year-long investigation by BTA to establish the data required to correctly analyze carrier behavior and market trends,” according to the FMC. “Under the new criteria, carriers participating in an alliance will be required to disclose pricing information about cargo moved on significant trade lanes, and both carriers and alliances will be required to give full capacity management information.”
BTA is in charge of constantly assessing whether carriers and their alliances are in compliance with shipping legislation and whether they have an anticompetitive influence on the market.
The FMC stated that the alliances are already subject to “the most frequent and stringent monitoring requirements of any type of agreement” filed with the agency, which include detailed operating data, minutes from meetings among alliance members, and meetings with alliance members where FMC staff address issues of concern.
“The commission continuously evaluates its reporting requirements and updates the information it expects ocean carriers and alliances to file as conditions and business practices change.” “As needed, more adjustments to requirements will be issued,” the agency stated.
FMC Chairman Daniel Maffei testified on the agency’s 2023 budget request on Capitol Hill last week, saying that a large part of the reason for the 5.2 percent ($1.8 million) funding increase he is seeking for next year is to increase enforcement staff to address complaints from ocean carriers’ customers.
“Aggravated shippers continue to send information with us about poor service — all of which is examined for potential legal violations,” Maffei testified.
“There has been a significant increase in litigation initiated before the commission, both in small claims and formal complaints before our administrative law judge.” Our local representatives and Bureau of Enforcement officials are following up on all leads in order to identify potential enforcement actions.”
However, Maffei also stated that the service delays and capacity challenges encountered by shippers over the last two years are not primarily the fault of ocean carriers. “Rather than transporting less cargo, maritime carriers are carrying record-breaking amounts of containers into the United States,” he testified.
“The largest challenge is not getting ocean carriers and seaports to carry and process more cargo, but addressing and resolving challenges with domestic networks and infrastructure in the United States that are far more severe constraints on supply chain capacity.” The availability of intermodal equipment, warehouse space, intermodal rail service, transportation, and sufficient people in each of these sectors continue to be hurdles in getting more cargo off our ports and to destinations with more certainty and reliability.”
