Date: Thursday, September 17, 2020
Source: The Load Star
US ocean regulator the Federal Maritime Commission (FMC) has fired a warning shot across the bows of container shipping lines, saying it will head to the courts if there is evidence of collusion on the transpacific trades.
Freight rates between Asia and the east and west coast of the US have reached record highs in recent months and, following a closed meeting of FMC commissioners yesterday, the regulator said it was looking into possible infringements of competition law.
“If there is any indication of carrier behaviour that might violate the competition standards in section 6(g) of the Shipping Act, the commission will immediately seek to address these concerns with the carriers.
“If necessary, the FMC will go to federal court to seek an injunction to enjoin further operation of the non-compliant alliance agreement,” it said, adding that it had “heightened its scrutiny of markets, individual ocean carriers, and the three global carrier alliances in response to the unusual circumstances and challenges created by the Covid-19 pandemic”.
It said it had received “detailed reports that addressed trends in spot rates, longer-term service contracts, utilisation of equipment, blanked sailings, revenue trends, the policies of individual carriers and global alliances for service changes, as well as what notice must be provided to the FMC when there are blanked, cancelled or amended voyages.
“The FMC is actively monitoring for any potential effect on freight rates and transport service levels, using a variety of sources and markers, including the exhaustive information that parties to a carrier agreement must file with the agency,” it added.
While carriers have continued to restrict capacity, the transpacific trade has seen a surge in demand over the summer. Last week, Hackett Associates’ Global Port Tracker recorded US ports handling 1.92m teu in July, which although being down 2.3% year on year, was up 19.3% on June, “and significantly higher than the 1.76m teu forecast a month ago”.
And it currently forecasts August’s throughput at 2.06m teu, which would be 6% higher than August last year and represent the highest monthly throughput on record, “beating the previous record of 2.04m teu set in October 2018”.
Data from the port of Los Angeles supports this – it said this week that August container throughput was its highest ever, at 961,833 teu, which was up 12% year on year, and saw loaded imports breach the 500,000 teu mark for the first time.
Meanwhile headhaul spot rates continue at historic highs: today’s World Container Index (WCI) from Drewry recorded a Shanghai-Los Angeles spot rate of $3,922 per 40ft, which Drewry said was 2% up on last week and a staggering year-on-year 182% increase.
It is a similar situation on the Asia-US east coast trade, with today’s WCI Shanghai-New York reading $,716 per 40ft, up 3% week on week and 94% year on year.
However, it appears carriers have begun to heed warnings from the FMC and China’s ministry of transport. This week, Ocean Alliance member OOCL announced it was reinstating six of nine previously announced blanked sailings on the transpacific slated to take place around the Golden Week holidays.