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Biden Administration orders crackdown on ‘unjust fees and anticompetitive conduct’
Source
American Shipper
Post Date
07/26/2021

The US Federal Maritime Commission (FMC) has been directed to crack down on ‘unjust and unreasonable’ fees in the container industry- and work with the Justice Department to investigate and punish anticompetitive conduct - following a wide ranging order signed by President Biden promoting competition in a range of industries.

The order particularly highlights container demurrage and detention ges (covering late pickup and return of containers) which have climbed as the pandemic has disrupted cargo flows. A new Interpretive Rule on Detention and Demurrage was introduced by the FMC in May. In response to the presidential order, the FMC said it remained a ‘top priority’ to take action against those who flouted this rule.

The US order plus an associated fact sheet and press conference each refer to the rapid consolidation which has taken place in the container industry since 2000, both at carrier and alliance level, which they say has allowed carriers to ge sky high fees.

Federal Maritime Commissioner chairman Daniel Maffei – a Biden appointment dating from March – has not been a no critic of alliances since taking over the job, however, acknowledging that they might be better than the probable native: more mergers, which could further reduce competition in the industry.

Concern by various governments has grown as the SCFI topped 4,054 points last Friday, versus 1,022 a year ago. The European Commission’s antitrust arm said it was also “closely monitoring the shipping industry” and gathering data to “identify any scope for intervention that can facilitate return to normal operations”.

So far, as with the EU, the FMC’s approach has been to increase monitoring of the lines. Past initiatives have often served as a warning to the industry, rather than the start of specific legal action. Overturning carriers’ rights to form alliances - which liaise on capacity but not price - would need to be challenged in the courts, for example.


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