FMC’s Khouri to meet with European, Chinese regulators

The April meeting in Beijing will be the third global regulatory summit between Federal Maritime Commission, China’s Ministry of Transport and the European Commission’s Directorate General for Competition.    Federal Maritime Commission (FMC) Acting Chairman Michael Khouri said he will be in China this month for a third round of joint discussions between China, the European Union and the United States on the state of the ocean container shipping industry and on supervision of those issues.
   In 2013, the FMC hosted the first global regulatory summit with officials from China’s Ministry of Transport and the European Commission’s Directorate General for Competition in Washington, D.C. In 2015, representatives from the three agencies met again in Brussels to discuss antitrust and regulatory issues in maritime transport, and confirmed their renewed intentions to cooperate on these matters.
   The meeting this April occurs against a backdrop that includes the consolidation of major liner companies into three large vessel sharing partnerships (the 2M Alliance, the OCEAN Alliance and “THE” Alliance); and a decision by the U.S. Department of Justice to serve top executives at container liner shipping companies with subpoenas during the so-called “Box Club” meeting in March, an action that could reflect a developing “turf war” between the FMC and the Justice Department.
   Khouri and fellow commissioners Rebecca Dye, William Doyle and Daniel Maffei met with almost 20 officials from 13 different European embassies at an event held in the FMC’s hearing room on Thursday, March 23.
   This group of attaches that handles maritime affairs for their respective nations is commonly referred to as the “Cotton Club.”
   Khouri noted that 2017 marks “the 100th year of operation under our Shipping Act.” (Though the FMC was established in 1961, it traces its origins to the U.S. Shipping Board, created via the Shipping Act of 1916, which was signed into law by President Woodrow Wilson on Sept. 7, 1916).
   “The U.S. Shipping Act was enacted in recognition that competition in the international liner trade is different,” Khouri said. “Special consideration is warranted due to the important role of the liner trade in global commerce and the potential for competing – even conflicting – regulatory regimes of our international trading partners. The Federal Maritime Commission stands forward to safeguard America’s maritime supply chain and we do this in a number of areas.”
   In letters to the FMC last year, the Justice Department had expressed concerns about the OCEAN Alliance and THE Alliance, noting it “has long taken the position that the general antitrust exemption for international ocean shipping carrier agreements is no longer justified. The ocean shipping industry exhibits no extraordinary characteristics that warrant departure from competition policy.”
   Khouri told the European attaches, “My personal view point is embedded in the opening Declaration of Policy statement in the Shipping Act:
     • A nondiscriminatory regulatory process,
     • With a minimum of government intervention and regulatory costs,
     • And last yet first – placing greater reliance on a free, open and competitive marketplace.”