Digital Edition

Nov.24, 2014

Issue link:

Contents of this Issue


Page 13 of 47

GOVERNMENT WATCH INTERNATIONAL | WASHINGTON | CUSTOMS | SECURITY | REGULATION 14 THE JOURNAL OF COMMERCE NOVEMBER 24.2014 By Peter Tirschwell and Qingqing Chen By Peter T. Leach THE CONTAINER INDUSTRY needs a "global regulatory approach" as a counterweight to the size and power of the global carrier alliances, U.S. Federal Maritime Commis- sioner Richard Lidinsky says. The four major alliances now taking shape will control 95 percent of the cargo moving in global container trade, Lidinsky told this month's European Maritime Law Conference in London. Lidinsky, who was FMC chairman from 2009 to 2013, in October had criticized the FMC staff's expedited handling and clear- ance of the application of the Ocean Three Alliance among China Shipping, CMA CGM and United Arab Shipping Co. His FMC experience has helped him "realize that ocean carriers detest any regulation," he said in London, and that "one gets the impressions that certain carriers favor what I call the ATM antitrust approach — i.e., give us our immunity in 45 seconds." He lambasted what he called the "unbridled sense of entitlement by the carriers filing their agree- ments, seeking the state of immunity, and belief that certain 'rights' flow from it." Lidinsky delivered his speech at a time when two large new alliances will launch next year, the Ocean Three, and the 2M Alliance between Maersk Line and Mediter- ranean Shipping Co. They will join two other large existing alliances that are expanding their cooperation and services, the G6 Alli- ance among the six carriers that belonged to the former Grand Alliance and the New World Alliance, and the CKYHE Alliance among four Asian carriers. These alliances are expanding their cooperation to reduce costs and overcapacity resulting from major ship orders over the past several years. The carriers expect to be granted the right to antitrust immunity even though they "fail to acknowledge that the real demons in their corporate existence — overcapacity, weak rates, unsustainable GRIs, equipment short- ages, and port congestion — are of their own making and not the result of any ruling" by the EU, China or the FMC, Lidinsky said. In support of the goal stated by cur- rent FMC Chairman Mario Cordero of a more uniform international approach to regulation, Lidinsky said, "He correctly observed in the recent 2M case that by the FMC not taking a global view of alliances, it has severely hampered the creation of necessary legal tools to judge alliances on a global basis." The FMC can't singlehandedly take on the task of global regulation, and there is little likelihood of a uniform approach to regulation, Lidinsky said. "Having said that," he added, "I feel that it is possible to have coordinated and harmo- nized actions by all regulatory authorities who wish to participate." JOC Contact Peter Leach at and follow him on Twitter: @petertleach. NO ALLY OF CARRIER ALLIANCES With the Big 4 soon to control 95 percent of box trade, FMC's Lidinsky calls for global VSA regulation Richard Lidinsky 2M ON TRACK, MAERSK SAYS The agreement among the two largest container carriers will launch in January, but could face further scrutiny in China T H E 2 M V E S S E L - S H A R I N G a g r e ement between Maersk Line and Mediterranean Shipping Co. will launch in January, Nils Anderson, Maersk Group chief executive, confirmed this month during the compa- ny's third-quarter earnings call. "We don't expect anything to go wrong," he said. "The European Union and China and the U.S. will reserve their rights to observe what we are doing, and if they believe that we act against laws or what they like to see, there can be some mea - sures taken, but we have no plans of doing anything but the capacity sharing, and that is approved in the U.S. and it's reported or explained both in China and the European Union. So we will start taking orders in December, and the network will go live in January." Maersk said much the same thing in October after the U.S. Federal Maritime Commission approved the agreement. "The U.S. was the only remaining jurisdic- tion where the parties had to obtain formal approval," the carrier said at the time. "Thus, the parties can now implement the agreement as planned." The 2M ag reement will face addi- tional scrutiny in China if the two carriers don't reduce their combined market share

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - Nov.24, 2014