European Shippers' Council Issues Stern Critique of Shipping Alliance, Urges Global View

Choumert tells FMC a national viewpoint is not enough

European Shippers' Council (ESC) Chairman Denis Choumert has delivered strong criticism of a proposed shipping alliance agreement to the U.S. Federal Maritime Commission (FMC), Shippingwatch reports.

The so-called CKYHE shipping alliance, which brings together Cosco, K-Line, Yangming, Hanjin, and Evergreen, is seeking FMC approval to operate.

Choumert called on the FMC to take an international viewpoint and lead the way for other regulators to act on alliances.

"No one can look at this tremendous modification of the shipping market on a national point of view only," he said, adding that the alliance will operate 20 percent of the global container fleet.

He encouraged the FMC to impose on CKYHE "the implementation of some kind of control on the possible effects of any anti-competitive behavior on the domestic U.S. markets.

"This step could pave the way of similar steps taken by the other major regulation authorities."

The proposed alliance agreement would allow CKYHE the ability to negotiate in concert with ports, port services operations, and other third parties, wrote Choumert, allowing "the huge size and bargaining power of the ship owners" to exercise unfair leverage.

As it stands, the CKYHE agreement is also said to allow for members to agree on surcharges, which Choumert says could be used as effective rate rises by carriers.

In addition, "it should be clearly stated that any exchange of sensitive commercial information is forbidden," he wrote, saying such a restriction is absent from the tabled agreement.

FMC Commissioner Richard Lidinksy recently called for a global regulatory approach to large shipping alliances.