Americas News
U.S. FMC Approves CKYHE Alliance
The U.S. Federal Maritime Commission (FMC) has announced in an emailed statement that the CKYHE alliance has gained U.S. regulatory approval, but will be subject to ongoing scrutiny from the regulator.
"I am in favor of not taking any further action to delay the implementation of this agreement, popularly known as CKYHE," said Commissioner William Doyle.
Doyle said he has been skeptical of the large alliances that have emerged over the last year but said he is satisfied by responses from the CKYHE companies.
"With the recent advent of "mega alliances" I have consistently raised concern over possible anticompetitive harms through disproportionate negotiating power of carriers with respect to small businesses and third party suppliers of goods and services such as bunker fuel, ship stores, equipment, etc.," said Doyle.
"The CKYHE Parties responded by submitting substitute language pertaining to sections of the proposed agreement as identified below."
The CKYHE parties will not be permitted to share commercially sensitive information about customers but they will be able to "discuss and agree on the procurement of goods [including] bunker fuel."
Doyle added that COSCO, K Line, Yang Ming, Hanjin, and Evergreen could expect ongoing scrutiny of their activities by FMC.
"In addition, I notified the Parties that the Commission will be specifically monitoring their interactions and activities related to suppliers and other third-parties," he said.
Doyle said FMC will expect updates on dealings with third party service providers such as terminals, container handling facilities and other port services.
He also said that third parties and small businesses which felt they had been adversely impacted by the alliance had legal remedies available through the U.S. Shipping Act.
In that context, Doyle concluded that the "CKYHE Agreement is not likely, through a reduction in competition, to result in an unreasonable increase in transportation service or an unreasonable increase in transportation costs."
The European Shippers' Council recently urged FMC to take action to tighten the scope of the CKYHE agreement.
