FMC takes issue with THE Alliance’s structure

FMC takes issue with THE Alliance’s structure

William Doyle, a commissioner at the Federal Maritime Commission, has warned the new container grouping THE Alliance that it will need to change the details of its working structure as it appears to monopolistic.

Speaking to the North Atlantic Ports Association earlier this week, Doyle said: “I have serious concerns with proposed language in the agreement related to the joint contracting and purchasing power.”

Doyle elaborated: “As a commissioner, a main concern during the review process is that ocean carrier alliances could hurt domestic businesses by using their collective power to jointly negotiate and jointly procure services from suppliers like tug operators, barge services, bunker fuel suppliers, chassis providers, container equipment lessors, feeder services and/or marine terminal and stevedoring services.”

Concerns about joint contracting have also been raised by industry groups and the Department of Justice’s antitrust division.

THE Alliance comprises Hapag-Lloyd, K Line, MOL, NYK and Yang Ming and is due to start operations next April.

Doyle has discussed his concerns with members of the THE Alliance and he said he is confident thy will submit what he described as “appropriate substitute language” to alleviate these fears.

“It would not be fair to grant ocean carriers the ability to jointly contract and procure services while the domestic service providers cannot negotiate collectively. This would bring THE Alliance into parity with the 2M and Ocean Alliance agreements,” Doyle said.

 

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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