The proposed THE Alliance will become effective Dec. 19 as a result of the Federal Maritime Commission's completed review, the FMC said in news release (here). "The Commission voted to allow the agreement to become effective following a period of substantive and constructive discussion with the parties," it said. The agency will allow the alliance to proceed despite some objections submitted by the Justice Department over anti-competitive concerns (see 1611280024). "I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information sharing and joint procurement," FMC Chairman Mario Cordero said. "This office will continue to carefully focus on the impacts of the carrier alliance restructuring that is taking place in the shipping industry. Considerable review and analysis goes into assessing a final agreement before it is allowed to go into force. Five container shipping companies -- Hapag-Lloyd, K Line, MOL, NYK and Yang Ming -- make up THE Alliance. "Under the terms of the agreement, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements," the FMC said. The DOJ didn't comment.

The Federal Maritime Commission should seek additional information about the recently filed THE Alliance Agreement due to the possibility of anticompetitive issues, the Justice Department's Antitrust Division said in comments to the FMC (here). The FMC published a notice about the agreement earlier this month (here). The DOJ said its objections to the THE Alliance are similar to the concerns it submitted about the OCEAN Alliance, which the DOJ unsuccessfully pushed the FMC to prevent (see 1611080022). "THE Alliance Agreement raises a number of significant competitive concerns, particularly as it comes on the heels of the recently approved OCEAN Alliance," the DOJ said. "The creation of these two new alliances will result in a significant increase in concentration in the industry as the existing four major shipping alliances are replaced by only three." Parties to the agreement would be "Hapag-Lloyd AG and Hapag-Lloyd USA LLC (acting as one party); Kawasaki Kisen Kaisha, Ltd.; Mitsui O.S.K. Lines, Ltd.; Nippon Yusen Kaisha; and Yang Ming Marine Transport Corp.," according to the FMC notice. "As you are aware, once an agreement among ocean carriers is filed with the FMC and becomes effective, conduct covered in the agreement could enjoy immunity from the antitrust laws," the DOJ said in the comments. "Where, as here, an agreement contemplates extensive cooperation among members, extreme caution is warranted. We strongly urge the Commission to seek additional information from the carriers and to conduct a rigorous review of the record." A lawyer for the THE Alliance didn't comment.

Almost all the 21 “selected industry groups” interviewed by the Government Accountability Office “said that shippers in their respective industries using major West Coast ports were affected by recent port disruptions,” such as the labor impasse that virtually shut down 29 West Coast ports in 2014 and 2015 (see 1502230002), an Oct. 31 GAO report said (here). Higher costs, lower revenue and shipment delays were the “main types of short- and long-term financial and business impacts” the industry groups said their members experienced from the 2014 and 2015 port disruption, GAO said. Almost all cited “some form of increased costs, and several industry groups experienced multiple types of increased costs,” the report said. “Some of the impacts were short-term -- such as increased costs or shipment delays -- while other impacts were of longer-term duration, such as the loss of sales, customers, or market share.”

The Federal Maritime Commission gave its approval to the OCEAN Alliance, which will go into effect Oct. 24, the agency said (here). The alliance includes COSCO Shipping, CMA CGM, Evergreen Marine, and Orient Overseas Container Line Limited. The members will now be allowed "to share vessels; charter and exchange space on each other’s ships; and, enter into cooperative working arrangements in international trade lanes between the United States and ports in Asia, Northern Europe, the Mediterranean, the Middle East, Canada, Central America, and the Caribbean," the FMC said. "The Commission worked very hard to balance the needs of not only the OCEAN Alliance applicants, but all other parties involved in the intermodal supply chain, with the ultimate goal of safeguarding competition in international oceanborne common carriage, with the American shipping public foremost in mind," FMC Chairman Mario Cordero said. "The Agreement going into force represents a consensus of what will allow OCEAN Alliance carriers to achieve efficiencies without harming the marketplace."

Wallenius Wilhelmsen Logistics (WWL) and an affiliated company, Eukor Car Carriers, will pay $1.5 million in civil penalties as part of a settlement with the Federal Maritime Commission over alleged Shipping Act violations, the FMC said in an Oct. 11 news release (here). "This settlement is one of several similar enforcement actions against major players in the car carrier industry who elected to provide transportation under agreements concealed from the Commission and the shipping public," FMC Chairman Mario Cordero said. "The penalties exacted by the Commission reflect the seriousness with which [the] Commission views its responsibility to protect the shipping public from such unfair carrier practices. It is only through carrier adherence to their statutory obligation to file agreements that the Commission can fulfill its mission and its responsibility to shippers and competing carriers." The settlement resolves allegations that the companies worked with ocean common carriers to transport motorized vehicles without filing an agreement with the FMC, the agency said. The companies didn't admit to any Shipping Act violations, the FMC said. "WWL and EUKOR are committed to fair business practices and will continue to work with the FMC to this end," said a spokeswoman for WWL.

The Federal Maritime Commission increased its fees for filing complaints, petitions, agreements and other services, the agency said (here). Other fees were reduced or eliminated, it said. The changes became effective Oct. 1.

Cooperation and collaboration across the supply chain is needed to resolve operational and equipment issues that have arisen from the Hanjin Shipping bankruptcy, Federal Maritime Commission Chairman Mario Cordero said in a news release (here). While Hanjin’s bankruptcy won’t disrupt the supply chain long-term, it has created immediate issues related to empty containers and the availability of chassis, he said. "The men and women who work in the shipping business are individuals who are pragmatic, creative, and problem solvers. I know that business and port leaders are already working to find a place to put empty Hanjin containers which will in turn free chassis to return to service," Cordero said. “Cordero would like all those interested in maintaining productivity at the nation’s seaports, especially those gateways most impacted by the Hanjin bankruptcy, to consider what business and operational steps can be taken to alleviate any potential challenge to port productivity levels,” the news release said.

The Federal Maritime Commission reached settlements totaling $338,000 in civil penalties with a non-vessel operating common carrier (NVOCC) and six ocean transportation intermediaries, it said Sept. 29 (here). "The parties settled and agreed to penalties, but did not admit to violations of the Shipping Act or Commission regulations," it said. Of that total, $100,000 in civil penalties will be assessed against China International Freight Co. over allegations that it "obtained ocean transportation at less than rates and charges that would be otherwise applicable by improperly utilizing rates and charges limited to specific named accounts in its service contracts." Posey International, King Ocean Services, CL USA, Carlo Shipping International, Sino Connections Logistics and Baron Worldwide were also penalized, it said.

A recent Federal Maritime Commission proposal to allow a grace period of 30 days after an agreement is reached before non-vessel operating common carriers (NVOCCs) have to file amendments to NVOCC service arrangements (NSAs) would provide “much needed flexibility,” the National Customs Brokers & Forwarders Association of America said in comments to the FMC (here). Currently, NVOCCs have to closely monitor vessel rate and surcharge changes so they can immediately file amendments that incorporate any changes, it said. The FMC proposed the change on Aug. 22 (see 1608220032). However, the NCBFAA “continues to believe that the NSA essential terms publication and filing requirements do not serve a legitimate purpose,” it said. “So, while allowing for the retroactive filing of amendments is certainly a step in the right direction; complete elimination of this requirement for NSAs is warranted," it said. The trade association also called on FMC to allow "NRAs to include non-rate economic terms, including but not limited [to] credit and payment terms, rate methodology, surcharges, minimum quantities, forum selection and arbitration clauses," it said. "Allowing for incorporation of these terms would enable NVOCCs to negotiate and memorialize a complete transaction in a convenient, rational and transparent manner."

A coalition of importers, exporters, distributors, transportation and logistics providers, and other companies urged Commerce Secretary Penny Pritzker to continue engaging the South Korean government to smoothly resolve supply chain disruptions caused by Hanjin Shipping’s recent bankruptcy filing (here). Shippers are wondering when Hanjin ships will be allowed to access ports, whether creditors will seize goods after docking, where cargo is currently, where it will be unloaded, and how goods will be transported, the group said in a letter. “The trade community is also facing steadily increasing freight charges as they look for new transportation options as well as concerns about fees assessed on cargo,” the coalition said. Small and medium-sized firms could be disproportionately impacted as the situation persists, yet resolution of the matter would bring needed certainty to U.S. businesses, the letter says. CBP recently added two new scenarios to the agency's previously released guidance on vessel diversions due to the Hanjin bankruptcy (see 1609140016).