US watchdog keeps tabs on alliances

Maritime watchdogs in the United States plan to keep a closer watch on international container shipping lines to prevent a repeat of the problems cargo owners faced this year following a stronger than forecast rebound in global trade, reported the South China Morning Post.

Outlining the move, the Federal Maritime Commission (FMC) said its staff "will develop recommendations to enhance oversight of the three global [shipping] alliances". These comprise the Grand alliance, which includes Orient Overseas Container Lines; the New World alliance, which has Singapore's APL as a member; and the CKYH alliance led by Cosco Container Lines.

The commission said the focus on the three groups would be in addition to the FMC's continued "enhanced oversight of the Transpacific Stabilisation Agreement and Westbound Transpacific Stabilisation Agreement".

Both agreements are research and discussion forums whose members include top container shipping lines engaged in transporting transpacific cargo such as China Shipping Container Lines and Taiwan carriers, Evergreen and Yang Ming Marine.

The focus on carrier alliances and forums was among five proposals approved by the US Federal Maritime Commission as part of a final report and recommendations into vessel capacity and equipment availability by Commissioner Rebecca Dye.

The other measures approved at the meeting in Washington included the creation of an international ocean transport working group formed by the commission, shipping lines, shippers and freight forwarders that will concentrate on issues raised by Dye's inquiry.

The meeting also gave the green light to the continued operation of rapid response teams to provide prompt solutions to commercial disputes between shippers and carriers and support for an initiative looking at the availability of shipping containers.

Dye's investigation was launched following an outcry by cargo owners and shippers who faced huge freight rate increases and limited container shipping capacity that resulted in cargo being left in port and unable to be loaded on board ship.

Summing up the situation in September, the Global Shippers' Forum, which included representatives from Asian jurisdictions such as Hong Kong and Singapore, said: "The past year has witnessed a variety of unacceptable shipping practices, ranging from the imposition of abrupt and opportunistic rate increases and surcharges, cargo 'roll overs', the limitation of shipping capacity and a general lack of adherence to rate agreements and contractual arrangements on an unprecedented global scale.

"This has resulted in major disruption to global supply chains, often resulting in delayed deliveries, especially for time-sensitive shipments."

The difficulties were partly caused because shipping lines reduced capacity by parking ships or sailing them at slower speeds during the global financial downturn towards the end of 2008.

Lines failed to reactivate ships quickly enough because they were unsure of the strength of the economic recovery in the early months of this year.

Commenting on the resurgence of transpacific trade, the Transpacific Stabilisation Agreement said: "Asia-US cargo growth for the year has been surprisingly strong and is forecast to settle near 12 per cent by year end. The first three quarters of 2010 saw 15 new and restored services enter the trade to meet demand, in part the result of improved rate levels."

By comparison, the TSA has forecast six to nine per cent growth in container volumes from Asia to the US next year.

Dye's report said that "although capacity conditions in the US trades have stabilised, certain underlying problems revealed during the commission's investigation should be addressed".

Reinforcing the commission's intention to strengthen its role as a shipping watchdog, the report "also concluded that the most effective long-term solutions to the commercial problems experienced by US exporters and importers this year will be developed by ocean carriers working closely with their customers within a framework organised by the commission".
(Source:www.cargonewsasia.com)