The Federal Maritime Commission (FMC) and the Department of Justice’s (DoJ) Antitrust Division signed an interagency MoU that will see both agencies monitor the liner shipping industry
The MoU will guide discussions and review law enforcement and regulatory matters impacting competition in the industry and comes in the wake of President Biden’s Executive Order addressing competition issued on 9 July 2021.
The FMC is the arm of the US Department of Transportation that regulates the maritime sector. Chairman Daniel Maffei noted “As such, we will continually assess how the agency can improve its capacity to protect the integrity of the marketplace. This memorandum between the Commission and the Department of Justice supplements and strengthens the FMC’s ability to detect, address, and pursue violations of the law or anticompetitive behavior by those we regulate.”
“Collaboration between the Antitrust Division and the FMC is important to ensure healthy competition in the maritime industry,” said DoJ Acting Assistant Attorney General Richard A Powers. “Our partnership with the FMC is one of the many ways in which the Antitrust Division is prepared to play its role in achieving the competition objectives of the President’s Competition Executive Order.”
Concerns about the nature and scale of corporate consolidation has driven the Executive Order. The White House noted that in over 75% of US industries, a smaller number of large companies now control more of the business than they did 20 years ago.
With the surge in freight rates, container ships worldwide face increased demand as economies emerge from lockdowns, although they are challenged by issues such as port congestion in China.
Liner operators have hit back with trade body World Shipping Council (WSC) blaming market demand, saying there is no problem to fix.
“The current supply chain disruptions are the result of an historic surge in demand by Americans for goods from overseas. There is no market concentration ’problem’ to ’fix’, and punitive measures levied against carriers based on incorrect economic assumptions will not fix the congestion problems. Only normalised demand and an end to Covid-related operational challenges will solve the bottlenecks in the supply chain,” said WSC president and chief executive John Butler.
Rates from Asia to the US east coast have risen from US$700 in 2020 to US$10,590 per 40-ft equivalent unit (FEU) as of today, while rates from Asia to west coast are pegged at $6,288 per FEU according to the Freightos Baltic Index.
Riviera Maritime Media’s Container Ship Tech & Ops Webinar Week is being held 2 September 2021 – use this link for more details and to register