FMC’s Khouri wants container alliances to provide congestion information

Commissioner says shippers have seen a deterioration in service and significant increases in costs.    Federal Maritime Commissioner Michael Khouri wants the FMC to request the four major alliances of ocean liner carriers to provide new information on the steps each is taking to reduce congestion at U.S. ports.
   “We have received private reports and seen numerous press accounts that the operations of the four alliances – G6, CKYHE, Ocean 3, and 2M – may be a contributing factor in the chronic congestion at the West Coast ports, and perhaps at other port facilities,” Khouri said last week.
   “In terms of overall costs and service levels in the liner supply chain as experienced by U.S. exporters and importers, there has been a deterioration in service and significant increase in costs due to several factors,” said Khouri, noting the FMC approved each of the alliances after full review of the alliance agreement under the standards set forth in Section 6 (g) of the 1984 Shipping Act. That provision requires the Commission to find that, by allowing the joint operation of competitor liner carriers, the operation of the alliance agreement will not produce unreasonable reductions in transportation service or unreasonable increases in transportation cost.
   Khouri noted there have been reports that because of the way containers are loaded on alliance vessels at Asian ports, there is now a need for additional handing of containers at terminals at U.S. West Coast ports. Other factors also playing significant roles in port congestion include issues surrounding the tentative longshore labor contract, chassis and drayage drivers.
   Khouri wants each alliance to report promptly to the FMC on information and operational steps each is taking to ameliorate and eliminate congestion issues at U.S. ports. Further, he is calling for updates to be temporarily included in the alliance’s quarterly reports as currently required in each alliance agreement’s periodic reporting requirements.
   Khouri’s counsel, John Moran, said the request is being discussed by FMC staff and commissioners.