FMC to introduce alternative reporting

The Global Shippers Forum (GSF) thanked the Federal Maritime Commission (FMC) for its thoughtful examination of the P3 Global Alliance Agreement in accordance with its remit under the US Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998.

GSF sources said that the US regulatory framework provides anti-trust immunity for ocean liner carriers to discuss prices, costs and capacity arrangements in a regulated environment under agreements filed with the FMC.

GSF Secretary General Chris Welsh said, "GSF members understand and appreciate the benefits that can flow from vessel sharing agreements. We welcome the fact that the FMC has listened to the GSF regarding unreasonable costs or rate rises. We also welcome the fact that the FMC is to implement alternative reporting in its 'on-going close monitoring of the Agreement'."

In November 2013, the GSF summarised the concerns of many shippers by calling upon the FMC to fully examine the potential impact of the P3 on prices, services and service quality to ensure that the unprecedented market power of the P3 did not afford the parties the opportunity to impose unreasonable increases in transportation costs or unreasonable reductions in transportation services impacting shippers.

On December 5, 2013, the FMC slowed implementation of the P3 Alliance Agreement pending further analysis based on questions raised by the GSF and other shipper interests.

Welsh said, "GSF further appreciates that the 'new reporting requirements' have been specifically tailored to the P3's 'unique authority' to ensure that relevant information is provided to ensure that the FMC can act quickly in the event of abuse or unreasonable increases in transportation rates and costs or reductions in transportation services.

GSF sources said that it was appreciative of the thorough analysis undertaken by the FMC. In particular, GSF has warmly welcomed the institution of specific monitoring program to ensure that the P3 parties "play by the rules". We also welcome the safeguards drafted into the P3 Agreement to ensure that the P3 Parties negotiate independently and enter into separate contracts with third parties.

Chris Welsh said, "This is exactly what the GSF sought under the FMC's regulatory authority. We will offer our observations to the FMC to discuss implementation of monitoring arrangements and how GSF can assist this on-going process".

Attention now turns to Brussels where the GSF recently submitted a new legal brief, framed by the EU's guidelines on competition.