FMC probes Australia/New Zealand trade

FMC probes Australia/New Zealand trade    The U.S. Federal Maritime Commission said it is investigating the Australia-New Zealand trade, noting concentration of the business among a half-dozen carriers.
   The FMC said it has issued an order under Section 15 of the Shipping Act of 1984 requiring carriers providing direct services in the U.S./Australia-New Zealand trade to submit information regarding current trade and competitive conditions. Named as respondents, individually and as agreement members, are Hamburg-S'd, Hapag-Lloyd, Maersk Line, CMA-CGM, ANL Singapore and Marfret.
   “The order demonstrates our particular concerns about competition in these important U.S. trades. Especially in the U.S. southbound trades, U.S. manufacturers and exporters stand to be directly impacted by the competitive activities of those carriers servicing this trade,” said FMC Chairman Richard A. Lidinsky Jr. “I encourage interested members of the public to contact the commission with any questions or concerns they may have, or to provide information that may assist the commission in better assessing the current trade conditions faced by U.S. exporters.”

Lidinsky

   The FMC said the half-dozen lines are the sole providers of direct container service in these trades, and operate pursuant to a number of FMC-filed agreements.
   “The high market share of these agreements coupled with the members’ ability to discuss and voluntarily agree on both rates and capacity have given rise to significant concerns about potential adverse effects on U.S. exporters and importers that rely on these services,” the FMC said. “The Shipping Act of 1984 requires the commission to monitor the U.S. oceanborne trades for such effects and, if necessary, to take action against any collective activity likely to unreasonably affect rates or services in U.S. foreign commerce.”
   In addition, the new Section 15 Order will require that certain trade and capacity data be reported by the carriers on an ongoing basis.
   The agreements in question are: FMC Agreement No. 011741 (U.S. Pacific Coast-Oceania Agreement); FMC Agreement No. 012034 (Hamburg-Sud/Maersk Line Vessel Sharing Agreement); FMC Agreement No. 011931 (CMA CGM/Marfret Vessel Sharing Agreement); FMC Agreement No. 011117 (U.S./Australasia Discussion Agreement); and FMC Agreement No. 011275 (Australia and New Zealand-U.S. Discussion Agreement).
   The FMC said its action supplements an order it issued in August 2008, and reflects continuing concerns about the structure of competition in these markets.
   In July 2008, the FMC decided not to delay FMC Agreement No. 011741-012, covering the trade between the U.S. Pacific Coast and Australia, New Zealand and the Pacific Islands. But it expressed serious concerns regarding the substantial market power that carrier may exercise through the combination of their ability to restrain capacity and agree upon rates through participation in related rate discussion agreements.