Advocacy activity relating to shipping competition - US
FMC have determined US shipping competition is "vigorous"
In line with the advocacy activity relating to shipping competition and container detention, they have prepared the following update:
US FEDERAL MARITIME COMMISSION
The United States Federal Maritime Commission (FMC) has released a 65-page report into the effects of COVID-19 on the Ocean Shipping Supply Chain – available HERE.
Outlined below are some observations relating to the said report: Shipping Competition Of significant note are the following references:
the current market for ocean liner services in the Trans-Pacific trade is not concentrated and the Trans-Atlantic trade is only minimally concentrated;
competition among ocean common carriers, among the three major alliances, and among the members in each of these alliances, is vigorous;
the market for ocean services remains highly contestable, particularly in the Trans-Pacific trade;
ocean transportation prices, especially spot prices, are disturbingly high by historical measures, those prices are exacerbated by the pandemic, an unexpected and an unprecedented surge in consumer spending, particularly in the United States, and supply chain congestion;
‘blank sailing’ was a particular concern because of its potential to be used for anti-competitor purposes, however, the report suggests reduced service by ocean carriers was driven by port congestion rather than a desire to reduce capacity; and
the historically high freight rates experienced recently by U.S. exporters and importers have been devastating to many, but the FMC claims it has done its job during the COVID-19 pandemic to enforce its competition authority.
In conclusion, Federal Maritime Commissioner Rebecca Dye expressed the opinion that US markets are competitive and the high ocean freight rates have been determined by market forces of supply and demand.
Container Detention
In terms of container detention, the report noted that some shipping lines are not in full compliance with the "Interpretive Rule on Demurrage and Detention" and that the FMC is ensuring compliance with the "incentive principle" embodied in the Rule.
GLOBAL COMPETITION REGULATORS
As a part of a Global Shippers Forum (GSF) Policy Meeting, As representatives we've joined colleagues for a detail presentation delivered by MDS Transmodal and GSF executives examining elements from the most recent Container Shipping Market Quarterly Review (2022: Quarter 1).
GSF members also provided a brief of their advocacy activity in dealings with national competition regulators. The most advanced appears to be Freight Management Association of Canada through their dealings withthe Canadian Competition Bureau and the US Department of Justice.
AUSTRALIA
In an Australian context, the much-anticipated release of the draft Productivity Commission report examining Australia’s Maritime Logistics Systems will reveal the key recommendation to be considered by the new Federal Government. As previously reported to members, the draft report was due to be released in May but will be delayed by several weeks as a result of the timing of the recent election and caretaker period.
OUR ADVOCACY
During this extended period until the draft is released, we will continue gathering evidence from members to support our eight (8) key recommendations as outlined in our original submission:
shipping competition review
minimum service levels and notification periods
infrastructure investment
regulation of Terminal Access Charges
regulation of container detention practices
waterfront industrial relations reform
implementation of Biosecurity reform priorities
extension of IFAM funding
Please forward evidence to Tony Vinson (Head of International Freight and Logistics - FTA / APSA) at avinson@FTAlliance.com.au . You may also reach out to an Image International representative at sale@imageinternational.com.au OR contact us here.
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