Commissioner Daniel B. Maffei Federal Maritime ......Commissioner Daniel B. Maffei Federal Maritime...
Transcript of Commissioner Daniel B. Maffei Federal Maritime ......Commissioner Daniel B. Maffei Federal Maritime...
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Commissioner Daniel B. MaffeiFederal Maritime Commission
Washington, D.C.
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And NOW
THEN…
And NOW
THEN…
A lot can change in a couple decades …
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THEN … And NOW
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THEN … And NOW
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Growth in Ocean Container Fleet Capacity
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Two decades of increasing container ship capacities …
http://www.worldshipping.org/about-the-industry/liner-ships/container-ship-design
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Delivered from Samsung Heavy Industries on March 27, 2017
Owner: Mitsui O.S.K. Lines
Length: 400 meters
Breadth: 58.8 meters
Depth: 32.8 meters
Capacity: 20,170 TEU
MOL Triumph
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Includes active fleet and layup poolSOURCE: Global insight for macroeconomic indicator outlook: Mckinsey Container Model and team analysis
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-2 0 2 4 6 8 10 12
CP Ships
Atlantic Container Line
Hapag-Lloyd AG
Sea-Land Service
Wilhemlsen Lines
Yangming
APL
Evergreen Marine Corp
CMB
Hyundai Merchant Marine
P&O Containers
OOCL
CSAV
Hanjin Shipping
UASC
AP Moller
Mitsui OSK Lines
Nedlloyd Lines
K Line
Zim Israel
Nippon Yusena Kaisha
CMA CGM
Neptune Orient Lines
1996 Net Profit Margins
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-20 -15 -10 -5 0 5
MAERSK
CMA CGM*
HAPAG-LLOYD
ZIM
EVERGREEN
YANGMING
WAN HAI
HYUNDAI**
KLINE**
MOL**
NYK**
COSCON**
OOCL
2016 Net Profit Margins
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Trend towards consolidation of carrier lines and alliances
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Hamburg Süd
THE
China ShpgChina Shpg
MaerskMed Shpg
UASC
APL
CMA CGM
[Hyundai]HyundaiMOL
COSCO
2M
Ocean 3
CKYHE
G6
MOL
OCEAN
THE
K Line
Yang Ming
Hanjin
K Line
Yang Ming
Hanjin
EvergreenEvergreen
Hapag-LloydNYKNYK
OOCL
OOCL
OOCL
Recent Mergers and Reshuffling of AlliancesFo
ur-
Alli
ance
Str
uct
ure
Three
-Allian
ce Structu
re
2MMed Shpg
COSCO
UASC
Hapag-Lloyd
APL
CMA CGM
Source: Bureau of Trade Analysis, Office of Economics and Competition Analysis
Ocean Network Express
COSCO
Maersk
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Weekly Transatlantic Capacity
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Weekly Transpacific Capacity
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Need for IncreasedPort Infrastructure
Higher Port Charges
Greater use ofTransshipment
Overcapacity
Lower Freight Rates
Carrier IndustryVolatility and Cost Cutting
GreaterCommoditization
Carriers ConsolidationAlliancesMergers
Bankruptcies
Increased Coststo Shippers
Larger Container Ships
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Most of U.S. internationalmaritime law dates back
34 years agoto Shipping Act of 1984
Last substantial changes made20 years ago
With Ocean Shipping Reform Act in 1998
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Federal Maritime Commission
1) Review Alliance Agreements
2) Supply Chain Innovation Initiative
3) Proposed Rulemaking to Decrease
Requirements for NSAs and NRAs
4) Consideration of Petition P4-16
(Shippers’ Detention & Demurrage petition)
5) Provide assistance (CADRS)
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Supply Chain Innovation Initiative
• Two teams – import and export
• Both teams identified the unmet critical information needs – must be accurate, timely, and available
• Conclusion:Increase visibility of critical information
through introduction of a National Seaport Information Portal
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Supply Chain Innovation Initiative Final Report, https://www.fmc.gov/assets/1/Page/SCITFinalReport-reduced.pdf
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Proposed Rule: NVOCC Service Arrangements (NSAs) and Negotiated Rate Arrangements (NRAs)
• On November 27, 2017, the FMC issued a Notice of Proposed Rulemaking relating to NSAs and NRAs
• One of the biggest steps towards deregulation ever
• Three key changes in the proposed rule:
• Remove the filing and publication of essential terms requirement from NSAs;
• Permit NVOCCs and shippers to amend NRAs (including after the shipment is received); and,
• Allows the act of booking cargo to be considered acceptance of a rate under the terms of an NRA.
• The FMC invited comments on whether we should also amend NRA rules to allow inclusion of non-economic terms
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Detention and Demurrage Petition
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• Mega ships, vessel bunching, and deficiencies in infrastructure contribute to port congestion (May result in detention, demurrage, and/or per diem charges)
• Some shippers claim that fewer alliances, consolidations among carriers, and their changing relationships with terminal operators have made it more challenging to negotiate a fair deal on these charges.
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Detention and Demurrage Petition
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• The Coalition for Fair Port Practices filed a petition with the Commission regarding current demurrage and detention practices
Petition requests the Commission provide guidance regarding what are just and reasonable detention and demurrage rules and practices
• The Commission recently held two days of hearings on the petition
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Detention and Demurrage Petition
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• Petition supporters included shippers of all sizes, NVOCCs, and truckers• Testified about situations where demurrage
and detention were charged though they were not at fault, such as for government inspections
• Presented the seemingly arbitrary manner in which detention/demurrage are assessed, and challenges working with carriers/terminals/ports
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Detention and Demurrage Petition
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• Petition opposition included carriers, terminal operators, and ports• Say problems are less common and more
limited to specific issues such as the LALB slowdown in 2015
• Argue against a one size fits all remedy• Pointed out often they are also not at fault
and frequency with which detention/demurrage are waived
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Detention and Demurrage Petition
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• The official record is open until February 1 so the Commission is still gathering information for its consideration of the petition
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FMC Consumer Affairs & Dispute Resolution Services
Phone: 202-523-5807
Toll Free (US only): 866-448-9586
E-mail: [email protected]
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Commissioner Daniel B. MaffeiFederal Maritime Commission
Washington, D.C.