FMC investigates shipping "choke points"

FMC investigates shipping "choke points"

A statement issued by the USA's Federal Maritime Commission (FMC) explains 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 portfolio of international container shipping services for both LCL and FCL import and export cargoes, the articles make interesting reading for Davies Turner.

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

Determining the significance of this investigation is difficult. 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.

For more information about Davies Turner’s ocean freight forwarding and logistics services, please contact ocean@daviesturner.co.uk or visit the relevant pages of this website.