FMC Chairman Addresses US-China Regulatory & Enforcement Issues at Bilateral Talks in California

Consolidation of shipping lines, realignment of carriers alliances, environmental improvements in the shipping industry, and achieving supply chain efficiencies were all among topics addressed during the U.S.-China Bilateral Maritime Consultations held in Los Angeles last week.

Federal Maritime Commission (FMC) Chairman Mario Cordero co-headed the U.S. delegation to the meeting with Deputy Maritime Administrator Michael Rodriguez. The consultations are organized by the Maritime Administration and the Chinese Ministry of Transportation and take place on a regular basis. This year’s session was held June 1-2.

“China is both a leading provider of manufactured goods, and a vast consumer of commodities from origins all around the world. It is not only a nation that depends on international ocean transportation to serve its import and export economies, but it is a nation with a leading shipping industry,” said Cordero. “The opportunity for U.S. Government agencies involved in the maritime realm to engage their counterparts from China allows not only for an exchange of information, but the chance to gain a perspective on the commercial and regulatory priorities of a major provider of transportation services that many American shippers purchase.”

During the two-day session, Cordero led discussions on a number of key topics where the Federal Maritime Commission has jurisdiction or particular competence. Two developing matters related to China and shipping were the merger of China Ocean Shipping Company and China Shipping Container Lines; and, the significant change in shipping company alliances that is taking place as a result of other merger and acquisition activity in the broader container shipping industry. Cordero also addressed ways in which the FMC is working to reduce port congestion by discussing the Supply Chain Innovation Teams Initiative launched earlier this year and being headed by Commissioner Rebecca Dye; and, he provided a briefing on how two different port alliance agreements filed at the Commission by the ports of Los Angeles and Long Beach and Seattle-Tacoma seek to improve efficiencies in those respective regions. The parties also discussed items related to controlled carriers and Non-Vessel Operating Common Carrier (NVOCC) bond recognition. Finally, Cordero reported to the Chinese delegation about changes to service contract filings the Federal Maritime Commission is considering implementing.

“Dependable and efficient ocean transportation between the United States and China is essential to the economic wellbeing of both nations and their citizens. These consultations make certain that officials in regulatory, promotional, and enforcement agencies in Beijing and Washington understand clearly pending policy developments and the commercial issues that might be driving such initiatives,” said Cordero. “These interactions are always valuable, but given what is happening in the shipping industry this year, I welcomed the opportunity to clearly express the Commission’s commitment to a competitive ocean shipping marketplace.”

Running concurrently to the U.S.-China Bilateral Maritime Consultations was the “U.S.-China Transportation Forum”, a ministerial level exchange where a much wider variety of matters related to transportation are addressed. Cordero also participated in segments of the Transportation Forum related to ports and maritime transportation.

“I commend the Maritime Administration for their dedicated efforts in organizing this latest round of consultations,” said Cordero. “Deputy Administrator Rodriguez represented the agency thoroughly and expertly.”

FMC Chairman Cordero (center) co-led US Delegation to US-PRC Bilateral Maritime Consultations in Los Angeles, June 2016