FMC applauds President Biden’s carrier crackdown

FMC applauds Biden's carrier crackdown

Federal Maritime Commission (FMC) Chairman Daniel B. Maffei has welcomed President Biden’s call for fairer price competition in the US maritime and logistics industries amid an investigation into the practices of major carrier alliances.

In a statement, Maffei said he applauds the “hands on deck” approach to ensuring fair competition across the supply chain, and that the FMC is doing all it can to fully participate in the “government-wide coordinated effort to benefit the US economy”.

The US government announced on 8 July 2021 that Biden had ordered the FMC to crack down on “unjust and unreasonable” fees for US exporters and work with the Justice Department to investigate and punish anti-competitive conduct.

The FMC is currently investigating the practices of carrier alliances, three of which control more than 80% of the global market for allegedly taking advantage of the boom in demand for container capacity and goods by raising prices.

It is also looking into allegations that carriers have broken contracts with US exporters, especially the agricultural sector, in favour of sending empty containers to China, where demand is higher.

“In recent months, we have increased our scrutiny of the ocean carrier alliances to identify evidence of anti-competitive behaviour regarding rates and capacity,” Maffei said.

“We will continue to do so as the COVID-19 and import surge crisis continues. We welcome the assistance and cooperation from other agencies, including the Department of Justice.

“With regard to detention and demurrage charges, it remains a top priority of the agency to identify and take action against those who flout the Commission’s recent interpretive rule on reasonable regulations and practices.

“The President’s action today reinforces these efforts and indicates his prioritization of a fair and reliable supply-chain.”

Carriers have enjoyed significant increases in profits since the beginning of the COVID-19 pandemic, driven by a huge spike in e-commerce activity and exports from China. Industry experts have predicted that carrier profits could exceed $100 billion despite continued disruption to global supply chain.

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