Unprecedented consumer demand to blame for US supply chain crunch: FMC

Rebecca Dye, a commissioner at the Federal Maritime Commission (FMC) in the US, yesterday released her final report after a two-year investigation into how the pandemic affected liner transportation, in which she suggested the global carrier market was competitive, and that massive American consumer demand was the root of the supply chain pain felt since 2020.

Dye stated, “The historically high freight rates experienced recently by US exporters and importers have been devastating to many, but I want to emphasise that the commission has done its job during the covid-19 pandemic to enforce our competition authority. Our markets are competitive and the high ocean freight rates have been determined by unprecedented consumer demand, primarily in the United States, that overwhelmed the supply of vessel capacity. Congestion further constrained available capacity.”

Dye said she was pleased the FMC has moved forward on enforcement of the interpretive rule on detention and demurrage and ensuring compliance by carriers with an incentive principle.

Dye’s report contains 12 recommendations which she said will provide clarity and consistency in certain port and supply chain operations, especially involving earliest return dates and empty container return.

US politicians have moved to give the FMC greater powers recently, while many involved in American supply chains are urging politicians to act on the findings of a recent global port productivity report issued by the World Bank, in which America’s main gateway terminals were listed as among the worst performing ports in the world.