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Update on FMC’s Fact Finding 29 on Global Container Alliance practices

FMC - Fact Finding 29 - shipping and freight resource
Source: Federal Maritime Commission

Fact Finding 29 is an order by the Federal Maritime Commission to investigate challenges to the freight delivery system in the USA and possible violations of the Shipping Act.

Commissioner Rebecca F. Dye was tasked by the FMC to carry out the investigation with the full authority under 46 C.F.R. §§ 502.281 to 502.291, to perform such duties as may be necessary in accordance with U.S. law and Commission regulations.

This order is part of the regulatory functions of the FMC which is responsible for regulating the U.S. international ocean transportation system that supports the transportation of goods by water in the foreign commerce of the United States – in other words, a Liner Service under the auspices of the Shipping Act of 1984, 46 U.S.C. 40101.

Fact Finding 29 was set up in response to many of the challenges faced by customers and complaints raised by them with the FMC convening teams of industry leaders to develop process innovations that would enhance supply chain reliability and resilience and address these industry concerns.

As part of this Fact Finding 29, Commissioner Dye is reported to have ordered 10 Shipping Lines and 17 Marine Terminal Operators to provide a compulsory report on their practices related to demurrage and detention, empty container return, and the availability of containers for the carriage of U.S. exports.

The responses to this compulsory order will form the basis of Commissioner Dye’s further actions on this issue which could include the commission taking action against practices that violate the law.

On the 7th of April 2021, the FMC met in a closed virtual session to discuss the developments on Fact Finding 29 and to receive a briefing on the agency’s monitoring activities of ocean carrier alliances.

The meeting was held as a closed session due to the investigative and confidential nature of the meeting’s agenda.

This was the first FMC meeting presided by Chairman Daniel B. Maffei since being designated as head of agency by President Biden last week.

Commissioner Dye reported on developments related to her investigation into the behavior and practices of certain ocean carriers and marine terminal operators.

A statement on the FMC website by Chairman Maffei states, “While most participants in the supply chain are doing their best to cope with the unprecedented import boom, there are reports of container ship lines and terminal operators unfairly taking advantage of the situation or denying service to exporters in a way that may violate the Shipping Act. 

We must get to the bottom of this situation ASAP and that’s why Commissioner Dye’s investigation is crucial.

Commissioner Maffei along with Commissioner Rebecca have reportedly met with the leaders of two important House subcommittees.

The feedback (or rather warning) from this meeting is that these issues clearly have grabbed the attention of the these leaders in the House and companies providing ocean transportation services would be well served to voluntarily take steps that address these challenges.

The Commission is also said to have received an update from the Bureau of Trade Analysis on overall trends affecting the U.S. economy and  the ongoing monitoring of three main ocean carrier alliances (2M, Ocean Alliance, and THE Alliance).

The global container shipping market is dominated by these 3 major global container alliances consisting of 10 container shipping lines, who together, control a whopping 83.80% of the total container shipping market across various services.

The global container alliances, their lines and their market share as of December 2020 stood as below.

global container alliance - shipping and freight resource

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