10.03.19FMC Sets out Probe into Capacity and Equipment Shortages



The U.S. Federal Maritime Commission (FMC) has initiated a Fact Finding Investigation into ocean vessel capacity and shipping equipment availability for U.S. exports and imports.



Reflecting the worldwide uptick in economic activity during the fourth quarter of 2009 and early 2010 cargo volumes shipped to the United States from Asia have increased as has the demand for export shipments from the United States. As a result shipping rates have increased Many ships remain idle and FMC has received a growing number of reports that importers and exporters have had difficulty obtaining vessel space particularly in the Asia ? U.S. trades. FMC has also received reports of U.S. exporters experiencing problems with the distribution and availability of shipping containers for their goods on those same Asian trades.



On January 27, 2010, President Obama launched a National Export Initiative with the goal of doubling U.S. exports over the next five years.



Recent reports of container vessel capacity and equipment constraints have raised concerns over both the cause of the constraints and whether those constraints could hinder the nascent economic recovery. Therefore, FMC has ordered an investigation into current conditions and practices in the U.S. and into potential impediments to the flow of ocean borne import and export trades. The regulatory agent will use the information obtained in this investigation and recommendations of the Fact Finding Officer to determine its policies with respect to vessel and equipment capacity related issues.



Specifically the Fact Finding Officer is to develop a record on the following:




1. Recent conditions in the U.S. export liner trades;

2. Recent conditions in the U.S. import liner trades;

3. Current and forecasted common practices by vessel operating common carriers regarding the management and allocation of VOCC, shipper and leasing company owned equipment for the U.S. import and export trades specifically the management, supply, allocation and availability of containers for all U.S. export commodities and categories;

4. Current practices and plans of VOCCs regarding the deployment of vessel capacity in the U.S. trades;

5. Current and planned common practices relating to service contracting in the U.S. liner trades. Specifically:
    a) The practices of VOCCs with respect to the booking of cargo before and after minimum quantity commitment of a service contract has been met but before the term of that contract has expired;
    b) The practices of VOCCs with respect to the cancellation of cargo bookings;
    c) The practices of carriers and shippers with respect to the overbooking of cargo; and
    d) The impact of those practices on the availability of liner service to meet the demands of U.S. exporters and importers; and

6. Any related conditions or practices that affect the U.S. liner trades.




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