Biden’s Shot Across the Bows for the World’s Shipping Lines
Of the many industries accused this month by US President Joe Biden of being dominated by a handful of firms, few have had their fortunes transformed so dramatically during the pandemic as container shipping.
Matthew Thomas, partner at law firm Blank Rome who formerly served as assistant general counsel for international affairs at the FMC, stresses that detention and demurrage charges have been a contentious issue between carriers and shippers for a long time. He doubts whether the executive order will have a “significant, substantive impact”, however, as it does not grant the FMC any extra powers to stop excess fees from being charged.
“Ten global competitors is not an oligopoly,” Thomas said. The detention and demurrage charges, he argued, were a response to market conditions, not an outgrowth of an elimination of competition.
“[The executive order] invites the FMC to do what it has been doing for the last few years,” Thomas added, leaving shipping liners’ freedom to co-operate on rate guidelines intact thanks to exemptions from normal restrictions on what information can be exchanged. “The order can’t really broaden or change the FMC’s underlying authority or jurisdiction — this is more of an exhortation for them to enforce their own rules.”
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“Biden’s Shot Across the Bows for the World’s Shipping Lines,” by George Steer was published in the Financial Times on July 19, 2021.