By Supply Chain Dive
This article was published in Supply Chain Dive March 1, 2022.
The Federal Maritime Commission and the Department of Transportation on Tuesday announced a resource-sharing agreement to ramp up enforcement of competition rules in maritime shipping.
Under the new agreement the DOJ will support the FMC with attorneys and economists from the antitrust division. The FMC will provide the DOJ's antitrust division with maritime industry expertise for Sherman Act and Clayton Act enforcement actions.
The new agreement was a result of the Biden-Harris administration's efforts to bring agencies together and better enforce competition rules, according to a White House fact sheet.
"Competition in the maritime industry is integral to lowering prices, improving quality of service, and strengthening the resilience of supply chains," the White House said in its fact sheet.
Ocean carriers have been under scrutiny before. In 2020, the FMC investigated claims about ocean carriers unfairly billing 3PLs, forwarders and brokers. A series of further investigations and task forces were later created to oversee ocean carrier practices.
Shipping executives disagree with regulators' probes into competition.
"It is a competitive industry, and it's far less concentrated than many, many other industries in the US and around the world," said John W. Butler, President and CEO of the World Shipping Council during a session at the TPM22 and TPMTech Conference produced by The Journal of Commerce in Long Beach, California.
But the Biden-Harris administration's claims are resonating with some shippers.
"I'm not saying there's collusion, but it's not competitive enough, said Lori Fellmer, vice president of logistics and carrier management at BassTech International during a conference session. "I listened closely to [A.P. Moller - Maersk CEO Vincent Clerc] this morning, who basically said, 'Yeah, it's kind of hard to get to elbow in with us big guys here.' And I'm paraphrasing of course but I think there is a real desire to create greater competitiveness in the market."
By the Numbers
+7.5% | Rise in the consumer price index for all items has risen over the last 12 months, according to the Bureau of Labor Statistics.
+182% | Annual increase in ocean freight rates from Asia to the U.S. west coast as of early February, according to Freightos.
$2.2 billion | How much money the top eight ocean carriers charged in fees from July 2021 to Sept. 2021, per an FMC estimate.