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FMC requires more pricing, capacity data from container ship companies

Federal regulators are stepping up oversight of ocean carriers by ordering them to submit more comprehensive pricing and capacity data with the goal of protecting against anticompetitive rates and service.

The Federal Maritime Commission announced on Thursday that the three global carrier alliances dominating global shipping (2M, Ocean and THE), along with the 10 member companies that participate in them, will now have to begin providing “uniform data to use in assessing ocean carrier behavior and marketplace competitiveness.”

The new information will give FMCs’ Bureau of Trade Analysis (BTA) insight into pricing of individual trade lanes by container and service type.

“The changes are the result of a year-long examination by BTA to determine the data needed to properly analyze carrier behavior and marketplace trends,” the FMC stated. “Under the new requirements, carriers participating in an alliance will need to submit pricing information about cargo they move on the major trade lanes, and both carriers and alliances will be mandated to submit comprehensive information related to capacity management.

BTA is responsible for continuously monitoring whether carriers and their alliances are complying with shipping regulations, and whether they have an anticompetitive impact on the marketplace.

The FMC noted that the alliances are already subject to “the most frequent and stringent monitoring requirements of any type of agreement” filed at the agency, including detailed operating data, minutes from meetings among alliance members, and meetings with alliance members where FMC staff address issues of concern.

“The commission assesses its reporting requirements on a continuous basis and adjusts the information it requires ocean carriers and alliances to file as circumstances and business practices change. Additional changes to requirements will be issued as warranted,” the agency said.

Testifying on the agency’s 2023 budget request on Capitol Hill last week, FMC Chairman Daniel Maffei said that much of the reason for the 5.2% ($1.8 million) funding increase he is seeking for next year is to boost enforcement staff to address complaints from the ocean carriers’ customers.

“Aggravated shippers continue to share information with us about unsatisfactory service — all of which is reviewed for potential violations of the law,” Maffei testified.

“There has been a noticeable uptick in litigation initiated at the commission, both in small claims as well as formal complaints before our administrative law judge. Our area representatives and Bureau of Enforcement personnel are pursuing all possible leads to identify possible enforcement actions.”

But Maffei also pointed out that service disruptions and capacity issues experienced by shippers over the past two years are not solely ocean carrier issues. “Far from carrying less cargo, ocean carriers are carrying record-setting volumes of containers into the United States,” he stated in his testimony.

“The biggest challenge is not to get the ocean carriers and seaports to carry and process more cargo, but how to address and resolve issues in the U.S. domestic networks and infrastructure that are even more severe limitations on the supply chain’s capacity. The availability of intermodal equipment, warehouse space, intermodal train service, trucking and enough workers in each of those sectors remain challenges to getting more cargo off our ports and to destination with more certainty and reliability.”

Click for more FreightWaves articles by John Gallagher.