FILE PHOTO: Container ships wait off the coast of the congested Ports of Los Angeles and Long Beach in Long Beach, California, U.S., October 1, 2021. REUTERS/ Alan Devall/File Photo

FMC Announces New Reporting Requirements for Ocean Carrier Alliances

Mike Schuler
Total Views: 1774
May 5, 2022

The three global ocean carrier alliances and each of their member companies will now be required to provide pricing and capacity information to the Federal Maritime Commission (FMC), giving the independent competition watchdog greater insight into carrier alliance operations.

The new mandate comes amid increased scrutiny of ocean carrier alliances amid pandemic-induced supply chain disruptions and soaring consumer demand that have caused shipping costs to reach record-highs during the pandemic, driving up prices for American consumers and businesses and also hurting exporters.

The three carrier alliances—2M, THE Alliance, and OCEAN—were approved by the FMC in 2014 and 2016 and allow members, which include the world’s largest shipping companies, to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements in international trade lanes.

The FMC said the mandate will provide it with uniform data helping to assess ocean carrier behavior and marketplace competitiveness.

Specifically, the newly mandated information will provide the FMC’s Bureau of Trade Analysis (BTA) with insight into pricing of individual trade lanes and by container and service type. It will also provide more immediate information regarding capacity management decisions of ocean carriers and alliances.

The FMC said 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. 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.

In its statement announcing the mandate, the FMC said one of its key responsibilities, through BTA, is to continuously monitor compliance with agreement authorities and to determine if agreements have an anticompetitive impact on the marketplace.

The three ocean carrier alliances are already subject to the most frequent and stringent monitoring requirements of any type of agreement on file at the FMC. Information already collected includes detailed operational data, minutes from meetings among agreement principals, and regularly scheduled meetings with agreement parties where FMC staff address issues of concern.

The FMC says it 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 may be issued as warranted, the FMC said.

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