Federal Maritime Commission Chairman Daniel B. Maffei joined his colleagues from the European Union and the People’s Republic of China for the fifth biennial meeting of the Global Regulatory Summit to discuss competition issues related to the shipping industry.

The meeting was hosted by the European Commission and held virtually on Tuesday, September 7, 2021.

Three broad agenda items were discussed during the meeting. First, sectoral developments since the start of the COVID-pandemic including an analysis of supply and demand and an identification of bottlenecks in the ocean-linked supply chain and the causes of service disruptions. Second, actions undertaken so far by relevant jurisdictions and authorities in response and their results. Finally, the way forward and possible actions to increase resilience and smooth operations in the sector.

The European Delegation was led by Henrik Mørch, the Director for Transport, Post, and Other Services, Directorate General for Competition. The Chinese delegation was led by Li Tianbi, Director General of the Water Transport Bureau, Ministry of Transportation, People’s Republic of China. Commissioners Rebecca F. Dye, Michael A. Khouri, and Carl W. Bentzel also attended the Summit on behalf of the FMC.

“The performance of ocean carriers in meeting historic demand for their services and the unusually high costs to move ocean containers are of interest and concern to regulators, legislators, and the public globally. Today’s session of the Global Regulatory Summit provided key competition authorities responsible for the oversight of the container shipping industry the opportunity to share information about what their respective monitoring and enforcement regimes are observing in the marketplace and compare conclusions about carrier behavior. I applaud my colleagues from the European Union for holding this meeting and providing a forum for an invaluable exchange of information,” said Chairman Maffei.

The delegations agreed to hold the next meeting of the Global Regulatory Summit in Beijing in 2023.

The first Global Regulatory Summit was held in December 2013 and hosted by the Federal Maritime Commission. Subsequent meetings were held in Belgium in 2015, China in 2017, and the United States in 2019.

During a recent meeting with chemical distributors, Commissioner Carl W. Bentzel heard concerns about systemic reductions for hazardous materials transportation via ocean. Distributors source chemical products from manufacturers overseas and sell them to diverse customers in the United States across all industries that use these chemicals to produce a wide range of goods critical to the economy and public health. Many of these chemical products are no longer domestically manufactured but are essential components of programs and products used by U.S. consumers daily. “I am troubled by reports that ocean carriers might be refusing to serve shippers importing hazardous materials. The inability to import these commodities could in turn harm U.S. manufacturers, and potentially jeopardize U.S. programs related to water purification and other strategic U.S. services and commodities that rely on the movement of international cargoes of hazardous materials. "Current surges of import cargoes have continued to stretch the abilities of the ocean liner industry. While I understand the fundamental challenges of addressing supply and demand in the congested intermodal transportation environment, shrinking shipping capacity could limit certain cargo movements. This means that market decisions by ocean carriers will determine who, and to what extent, shippers will receive service. "Section 41104(a)(10) of the Shipping Act prohibits carriers from unreasonable refusals to deal, and Section 41102(c) generally requires ocean carriers, ’to establish, observe and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property‘. These provisions, and others related to federal safety requirements governing the safe transportation of hazardous materials, help ensure that hazardous material cargoes are not discriminated against because of the nature of the material being shipped. "Given the potential implications of systemic refusals by shipping lines, I am urging that we broaden the scope of the Vessel-Operating Common Carrier Audit Program to include review of whether there have been any systemic decisions by ocean carriers to discriminate against hazardous materials transportation. Such a review could be conducted within the existing audit program and will make FMC oversight more focused and thorough during this volatile time.”

California Roundtable Discussions

During the week of August 30, Federal Maritime Commission Commissioner Carl W. Bentzel convened a series of roundtable discussions in Northern and Southern California with Congressman Alan Lowenthal, industry leaders, shippers and the State of California. The discussions focused on the myriad of supply chain challenges such as equipment availability, port congestion and U.S. exporter access to global markets. These issues have plagued the largest freight gateway in the United States throughout the pandemic, while impacting the economic health of the entire country. The first roundtable discussion was convened in Oakland on August 30th, followed by a joint roundtable with the Ports of Long Beach and Los Angeles held in Long Beach on September 1st. “These roundtables are an essential step in evaluating the value of a comprehensive approach to rectifying the inefficiencies in our supply chain. Oakland, and the port complex of Long Beach and Los Angeles, are vastly different ports, but they have been equally impacted by disruptions caused by the pandemic cargo volume surges,” said Commissioner Bentzel.

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