Comments of Commissioner Richard A. Lidinsky, Jr. on Proposed P3 Vessel Sharing Agreement - Federal Maritime Commission
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Comments of Commissioner Richard A. Lidinsky, Jr. on Proposed P3 Vessel Sharing Agreement

March 24, 2014

I vote to disapprove staff’s recommendation on this agreement for the below reasons.

In certain trades and circumstances I support the alliance carrier structure. They can assist in rationalizing services and calling new ports. However, this agreement is in reality not an alliance or true vessel sharing arrangement. Rather, it is in effect a merger of the top three global liner companies.

This agreement will allow the controlling carrier the ability, when coupled with existing discussion agreements, to deploy its assets along with those of the other two carriers, to dominate vessel competition and narrow shipper options at U.S. ports. Other than the publicity machine of the three would be partners to rally support, there is nothing in the record before us of Americans clamoring for this proposal.

The articulate and experienced comments of American parties involved in our international waterborne trade should have been given greater weight by staff in analyzing the impact of this agreement. However, since the Agency has in essence permitted over 1600 carrier agreements in the last 30 years — never stopping one — and sees nothing potentially harmful with the top three companies in an unprecedented combination, then perhaps the time is at hand for a thorough Executive and Congressional review of the 1984 Act to see how U.S. interests are being served by its current procedures.

Finally, from observing our industry over forty years from a variety of perspectives, I feel if we allow this agreement to take effect, it will become a model precedent. The United States, the European Union, the People’s Republic of China or any other regulatory authority will be hampered in protecting their national maritime interests in direct or cross trades. After nearly a decade of turbulence in the liner market, the last thing needed is this device designed solely to fill the largest ships of the controlling carrier at the expense, as one commentator has expressed it, of the world’s maritime architecture. The filing parties have every right to apply for this unique status under our anti-trust laws, however there is nothing in the statutes or regulations we administer requiring we grant the parties’ request to solve self-inflicted operational and commercial problems.

Therefore, I vote no and hope the Commission joins with me to seek a 6(g) injunction in this matter.