FMC chairman outlines LoBiondo Act implementation

The legislation, which was enacted into law on Dec. 4, set further restrictions on cooperation between ocean carriers and marine terminals.

FMC chairman outlines LoBiondo Act implementation

The legislation, which was enacted into law on Dec. 4, set further restrictions on cooperation between ocean carriers and marine terminals.

FMC chairman outlines LoBiondo Act implementation

The legislation, which was enacted into law on Dec. 4, set further restrictions on cooperation between ocean carriers and marine terminals.

 

   U.S. Federal Maritime Commission Chairman Michael Khouri assured House Coast Guard and Maritime Transportation Subcommittee lawmakers Tuesday that his agency is diligently implementing the 2018 Frank LoBiondo Coast Guard Authorization Act as part of its regulatory oversight.
    The legislation, which was enacted into law on Dec. 4, set further restrictions on cooperation between ocean carriers and marine terminals. These changes include removing antitrust immunity for certain activities, prohibiting certain joint procurement activities, restricting overlapping agreement participation and modifying the legal standard for enjoining agreements to jointly procure certain services.
    In addition, the LoBiondo Act expands and clarifies the FMC’s authority to seek information from marine terminal operators, and during agreement review, the agency may request information from interested parties other than the filing parties.
    The legislation implementation was mostly driven by House lawmakers’ concerns over container carriers’ ability to form alliances and then collectively negotiate with certain domestic service providers, such as harbor tugboat operators, in a noncompetitive manner.

   Khouri noted that the LoBiondo Act’s prohibition against rate discussion agreements engaging in vessel-sharing agreements, for example, has already had an impact on the carrier industry.
    “For example, the Transpacific Stabilization Agreement, which was the largest rate discussion agreement in our Pacific trades, in the face of the [LoBiondo] legislation decided to close operations,” Khouri said. “I think that was a good result.”
      He also said the commission has reviewed 438 different types of agreements on file in response to the LoBiondo Act.
    “We’ve been very meticulously going through every single one of them,” Khouri said. “There are about 160 of them have been preliminary flagged as perhaps having some need for modification due to the LoBiondo bill’s new requirements. We’ve been reaching out to each one of those to find out if there’s a need to amend those authorities.”
    In addition, Khouri pointed out to the House subcommittee that the commission has received no further requests from carriers or marine terminal operators for joint purchasing authority. “I think the industry heard Congress loud and clear,” he said.

We are seeing many more pricing requests for Southeast Asia and the Indian subcontinent. Few actually moved their supply chains outside of China because this will take time, especially for larger shippers. However, Taiwan and South Korea are in a unique situation: Some manufacturing had shifted to mainland China in the last decade due to lower costs, but that infrastructure is still in Taiwan and South Korea. Some manufacturing may temporarily shift back there until Southeast Asia infrastructure catches up. 

Average container vessel size on the Asia to North Europe trade actually shrank between May 2018 and May 2019, falling from 14,253 TEUs to 13,808 TEUs, although total container vessel count on the trade rose from 219 to 229, according to BlueWater Reporting’s Capacity Report.

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FMC chairman outlines LoBiondo Act implementation

The legislation, which was enacted into law on Dec. 4, set further restrictions on cooperation between ocean carriers and marine terminals.

May 22, 2019 on Dec 27, 2018AmericanShipper.com

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FMC chairman outlines LoBiondo Act implementation

The legislation, which was enacted into law on Dec. 4, set further restrictions on cooperation between ocean carriers and marine terminals.

May 22, 2019 on Dec 27, 2018AmericanShipper.com