FMC seeks more information on Ocean Alliance

Members of the U.S. Federal Maritime Commission voted in favor of requesting additional information from the four shipping companies planning to create the Ocean Alliance.    Commissioner William P. Doyle of the U.S. Federal Maritime Commission (FMC) said Thursday he voted in favor of requesting additional information from the four shipping companies planning to create a vessel sharing agreement called the Ocean Alliance (Agreement No. 12426).
   Doyle was joined by FMC Chairman Mario Cordero and fellow commissioners Michael A. Khouri and Daniel B. Maffei. Commissioner Rebecca F. Dye voted to abstain until the FMC staff completed their “6(g) analysis.”
   Agreements normally go into effect 45 days after filing unless the FMC seeks additional information. The FMC has asked for additional information from carriers planning alliances in the past.
   Under 6(g) of the Shipping Act of 1984, the FMC could theoretically go to a court and seek an injunction if it determined an “agreement is likely, by a reduction in competition, to produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost.”
   The four liner carriers planning the Ocean Alliance are COSCO, CMA-CGM (which recently acquired Neptune Orient Lines and its APL subsidiary), Evergreen Line and Orient Overseas Container Line (OOCL).
   The Ocean Alliance agreement was filed with the FMC on July 15, 2016, and would have become effective in 45 days, on Aug. 29, absent of FMC action.
   Doyle’s office explained the so-called Request for Additional Information (RFAI) effectively “stops the clock” on the agreement until such time as the filing parties answer the questions poised in the RFAI.
   Once those questions are answered and filed with the Commission, the agreement will go into effect after another 45-day waiting period.
   The members of the Ocean Alliance parties are looking to implement their agreement in or around April 2017, which Doyle said will give them “plenty of time” to respond to the FMC’s questions.
   “I pay special attention to competition matters especially to small businesses, downstream participants and the upstream — supplier and vendor markets,” Doyle said in regards as to why he made the request. “We’ve been down this road before with language proposed but not implemented by the P3 Alliance and the language in the existing 2M Alliance (between Maersk and MSC). I’d like to see fair dealing and transparency in how the parties handle negotiations with third parties, suppliers, small businesses and other service providers. Using their proposed buying power through proposed joint purchasing agreements could harm both downstream and upstream participants.”
   He added, “The existing 2M Alliance Agreement provides safeguards for U.S. third-parties (including small businesses), such as marine terminal operators, stevedores, tug operators and other providers or suppliers. The 2M Parties must negotiate independently and enter into separate contracts with the third parties.”