NEW YORK : The US Federal Maritime Commission (FMC) is demanding more information and pricing from the largest container shipping alliances accused of profiteering from the supply chain crunch,
New monitoring requirements from the US regulator will see 2M, Ocean Alliance, and The Alliance, being mandated to provide the FMC’s Bureau of Trade Analysis (BTA) with insight into pricing of individual trade lanes and by container and service type, as well as more immediate information on capacity management.
“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,” FMC.
The nine carriers in the three largest container shipping alliances collectively control over 80% of global boxshipping capacity according to figures from analyst Alphaliner, although not all of this capacity is not deployed on trades operated by the alliances.
The Commission said one its key responsibilities through the BTA was continuously monitor agreements and determine if there was any anti-competitive behaviour.
Container lines have been in the spotlight over alleged profiteering as freight rates have soared by more than 10 times for spot cargoes over the last two years on trades into the US and at the same time US exporters have struggled to find space on outbound ships. At the same time carriers have been reporting unprecedented annual profits ranging in 10s of billions of dollars.
While spot freight rates have eased somewhat they still remain extremely high, and have fuelled a huge increase in annual contract rates locking higher levels for a longer term. According to Drewry the average Shanghai – Los Angeles spot freight rate was $8,564 per feu as of 5 May, up 64% year-on-year. Shanghai – New York stood at $11,264 per feu, up 61% on the same time a year earlier.
US President Joe Biden targeted container lines in his State of the Union Address in March singling out foreign owned shipping lines for anti-competitive behaviour raising freight rates by over 1,000%. The US President said he was announcing a crackdown on companies overcharging American businesses and consumers.