Commissioner William P. Doyle’s statement on THE Alliance vote

Commissioner William P. Doyle of the U.S. Federal Maritime Commission issued the following statement after the Commission’s vote on THE Alliance Agreement:

“On Wednesday I voted to take no further action and allow THE Alliance Agreement to take effect on December 19th. THE Alliance (“THE”) brings together Hapag-Lloyd, K-Line, MOL, NYK, and Yang Ming as the as the final piece in the “second generation” of global ocean carrier alliances.”

“After receiving substitute language from the parties, key authorities in THE Alliance Agreement are now directly on par with authorities contained in the other second generation alliance agreements of 2M and the OCEAN Alliance. This follows the framework I have supported whereby alliance members must negotiate independently with American businesses such as tugs, barges, stevedores, chassis providers, container equipment lessors, bunker suppliers and other third party service providers in the U.S. On commercial matters THE parties can gain significant efficiencies by jointly discussing operational matters. I believe this balances the ocean carriers’ economic needs to gain operational efficiencies while the FMC exercises its duty to foster a vibrant domestic maritime sector for the American businesses, families, and workers that rely upon it.”

“The Agreement does allow THE to jointly negotiate with marine terminal operators who agree to such an arrangement. Looking forward, some ports and MTOs may wish to file their own agreements with the Commission permitting them to jointly negotiate as a group with the ocean carrier alliances.”

“I appreciate the initiative undertaken by THE carriers to place emphasis on how it can help a carrier member’s shippers and other customers in the event a carrier member becomes bankrupt. The Hanjin bankruptcy served as a wakeup call to carriers and shippers, and THE Alliance’s efforts to create a mechanism to keep cargo moving in the event of another carrier bankruptcy demonstrates that carriers and alliances have heard the concerns of the shipping public and are working to create commercial solutions to address those concerns.”

“I want to thank the parties for quickly addressing questions and concerns that were raised by Commissioners and FMC staff. I also want to thank individuals and organizations from within the industry that made their concerns about the agreement known. With the three second generation alliances now in place and set to be fully-functioning in the coming months, the Commission will engage in a thorough monitoring program of the alliances. Further, it is an important responsibility of the industry to engage with the FMC if there are improvements or changes that could be made to help foster a fair and efficient ocean transportation supply and export system.”

“I commend the professionalism exhibited by the principals representing all of the ocean carriers over the past few years as they realign their alliances.”