FMC starts enquiry about shipping choke points

In the USA, the Federal Maritime Commission (FMC) issued a statement outlining the launch of a “non adjudicatory investigation into transit constraints at key maritime chokepoints, focusing on the impact of foreign laws, regulations, and shipping practices”.

With our comprehensive portfolio of international container shipping services for both LCL and FCL import and export cargoes, this was interesting news for the U-Freight Group.

It seems that the FMC perceives that its role is to “prescribe regulations affecting shipping in foreign trade” if they are unfavourable to American shipping companies. As part of this mission, it has identified “choke points” as “constraints on transits,” and apparently, these count as some sort of competitive disadvantage.

The FMC has identified seven of these choke points; “the English Channel, the Malacca Strait, the Northern Sea Passage, the Singapore Strait, the Panama Canal, the Strait of Gibraltar, and the Suez Canal” and it is looking to ask a number of questions.

These include an examination of the causes, nature, and effects, including financial and environmental effects, of constraints on one or more of the maritime chokepoints.

In addition, the enquiry will seek to determine the extent to which constraints are caused by or attributable to the laws, regulations, practices, actions, or inactions of one or more foreign governments.

It will also consider the extent constraints are caused by or attributable to the practices, actions, or inactions of owners or operators of foreign-flag vessels.

It appears that the FMC is hoping to investigate if the management of these “chokepoints” is an obstruction to competition

It is difficult to determine the importance of this investigation. Under normal circumstance, we might assume that the FMC is trying to improve its understanding of the functioning of the shipping sector. However, some see the FMC as emerging as a policy tool of some importance for the Trump administration, and believe the FMC enquiry cannot be dismissed as routine.

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