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US probes possible pricing collusion by major vessel sharing alliances
THE US government is still pursuing a broader inquiry into possible collusion among shipping lines in the world's three major vessel sharing alliances, or VSAs - the 2M, Ocean, and THE alliances - which together handle 90 per cent of the Asia-North America container trade.
Legislators say the Federal Maritime Commission (FMC) Authorisation Act of 2017, although it has bipartisan support, is not a final solution, says IHS Media.
Although the carriers and alliances say there is no evidence collusion is occurring, a broad cross-section of US port service providers - including tugboat operators, marine terminals, and stevedores - have argued that it does not mean it is not possible.
According to the third-party service providers, the alliances have accumulated too much negotiating power and the FMC does not have the means or strategy to rein them in.
Republican Duncan Hunter introduced legislation on May 23 that aims to close loopholes. Not only would the legislation increase the FMC's annual budget some 13 per cent to US$28 million, but it would forbid carriers to negotiate with a provider of port services on any matter relating to rates or services provided within the United States.
That is, "unless advance notice is provided to the FMC of the intent and need for the negotiation, the negotiation and any resulting agreement are not in violation of the antitrust laws and are consistent with the purposes of this part, and, as determined by the commission, the negotiation and any resulting agreement will not substantially lessen competition in the purchasing of port services provided at United States ports."
The bill would also allow the FMC to file an injunction against a carrier or carrier alliance if a VSA is found to substantially lessen competition in the purchase of port services.
An additional amendment to the legislation, offered by Hunter at a May 24 mark-up by the House Subcommittee on Coast Guard and Maritime Transportation, would forbid carriers to negotiate with a provider of towing vessel services on any matter relating to rates or services provided within the United States by towing vessels.
Mr Hunter's legislation has received broad bipartisan support.
"I am pleased that this legislation would reauthorise and increase the funding for the Federal Maritime Commission to enable the commission to monitor the ongoing turbulence in the marketplace," said California Democrat Congressman John Garamendi.
Legislators say the Federal Maritime Commission (FMC) Authorisation Act of 2017, although it has bipartisan support, is not a final solution, says IHS Media.
Although the carriers and alliances say there is no evidence collusion is occurring, a broad cross-section of US port service providers - including tugboat operators, marine terminals, and stevedores - have argued that it does not mean it is not possible.
According to the third-party service providers, the alliances have accumulated too much negotiating power and the FMC does not have the means or strategy to rein them in.
Republican Duncan Hunter introduced legislation on May 23 that aims to close loopholes. Not only would the legislation increase the FMC's annual budget some 13 per cent to US$28 million, but it would forbid carriers to negotiate with a provider of port services on any matter relating to rates or services provided within the United States.
That is, "unless advance notice is provided to the FMC of the intent and need for the negotiation, the negotiation and any resulting agreement are not in violation of the antitrust laws and are consistent with the purposes of this part, and, as determined by the commission, the negotiation and any resulting agreement will not substantially lessen competition in the purchasing of port services provided at United States ports."
The bill would also allow the FMC to file an injunction against a carrier or carrier alliance if a VSA is found to substantially lessen competition in the purchase of port services.
An additional amendment to the legislation, offered by Hunter at a May 24 mark-up by the House Subcommittee on Coast Guard and Maritime Transportation, would forbid carriers to negotiate with a provider of towing vessel services on any matter relating to rates or services provided within the United States by towing vessels.
Mr Hunter's legislation has received broad bipartisan support.
"I am pleased that this legislation would reauthorise and increase the funding for the Federal Maritime Commission to enable the commission to monitor the ongoing turbulence in the marketplace," said California Democrat Congressman John Garamendi.
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