RFAI Key to Monitoring West Coast Agreement - FMC

 

Following is the statement of FMC Commissioner William P. Doyle follows:

We do not take our hands off the wheel just because an agreement is allowed to go into effect without the Commission taking any further action to delay the implementation of the agreement. FMC staff has requested certain information from the parties to the Pacific Ports Operational Improvements Agreement (PPOIA). To date, the response by the PPOIA parties has been incomplete. As a Commissioner I am interested in information including but not limited to service agreements between the vessel operating common carriers and the marine terminal operators, as well as information related to chassis operations.

To be clear, I strongly support the spirit and intent of PPOIA – allowing all stakeholders to meet and discuss port congestion and to find solutions to help alleviate and ultimately prevent future congestion.

The Commission closely monitors the activities of all agreements to identify emerging 6(g) (anticompetitive) concerns and to act quickly should it become necessary to resolve any concerns. By not producing the requested information, the PPOIA parties are impeding the Commission’s responsibility to properly evaluate and monitor the Agreement.

PPOIA was filed with the Commission on March 3, 2015, and went into effect on April 17, 2015. The purpose of the Agreement is to allow for discussion and the exchange of information between the parties, both carriers and marine terminal operators, to reduce port congestion and enhance efficiency on the West Coast.

Prior to the Agreement going into effect, I reviewed the comments submitted by the public and met repeatedly with counsel for the parties. Counsel was cooperative in answering my questions and they amended certain terms and conditions in the Agreement to help alleviate my concerns. I also met with private sector stakeholders and spoke with several West Coast port authorities. Importantly, I also listened to those who expressed concerns about the Agreement. As a result of these discussions, the parties agreed to narrow the scope of the Agreement to minimize possible anticompetitive effects, while still maintaining a cooperative effort to reduce port congestion.

As is typical with agreements of this nature, the FMC put in place a robust monitoring program. At the June 2015 Commission meeting, I voted in favor of directing FMC staff to prepare for consideration and approval of an order to require the ocean carrier members of the PPOIA agreement to submit certain data and information relevant to the Commission’s oversight responsibilities and further assessment of the competitive impact of the agreement. That vote was unanimous.

As a result of that directive, staff drafted a Section 15 Order to compel certain information to which I also voted to support. This Section 15 Order vote was also unanimous.

Section 15 of the Shipping Act, codified at 46 U.S.C. § 40104, provides the Commission with the authority to order common carriers and their employees and agents to report on matters germane to the business of the carrier. The authority of the Commission to use such orders to gather information is broad and has been used in the past to gather information on a variety of policies.

In other Commission action today, the Commission unanimously voted to delay the implementation of additional parties to the PPOIA agreement by stopping the 45-day clock—meaning the Commission has sent the parties a Request for Additional Information (RFAI).

Congestion and inefficiency in our ports do not square with a fair, efficient and reliable international ocean transportation system. I applaud all efforts to innovate and speed the flow of goods in and out of the United States. But all such efforts must also protect importers, exporters and the American consumer.

The parties served by the Section 15 Order are as follows: MAERSK LINE A/S; APL CO. PTE LTD.; COSCO CONTAINER LINES COMPANY LIMITED; EVERGREEN LINE JOINT SERVICE AGREEMENT; HAMBURG-SUDAMERIKANISCHE; ALIANCA NAVEGACAO E LOGISTICA LTDA.; HANHIN SHIPPING CO., LTD.; HAPAG-LLOYD USA; COMPANHIA LIBRA DE NAVEGACAO; COMPANIA LIBRA DE NAVEGACION URUGUAY S.A.; MITSUI O.S.K. LINES, LTD.; NIPPON YUSEN KAISHA LINE; KAWASAKI KISEN KAISHA, LTD.; HYUNDAI MERCHANT MARINE CO., LTD.; ZIM INTEGRATED SHIPPING SERVICES; CHINA SHIPPING CONTAINER LINES CO., LTD.; CHINA SHIPPING CONTAINER LINES (HONG KONG) CO., LTD.; MSC MEDITERRANEAN SHIPPING COMPANY SA; MATSON NAVIGATION COMPANY, INC.