Friday, December 16, 2016

Maritime Commission Approves Major New Carrier Alliance

By Mark Edward Nero

On Dec. 14, the Federal Maritime Commission announced that it has concluded its review of the proposed “THE Alliance” and is allowing it to go into effect as of Dec. 19.

The so-called “THE Alliance” is comprised of five different container shipping companies: Hapag-Lloyd; K Line; MOL; NYK; and Yang Ming. THE is an acronym for Transport High Efficiency.
Under the terms of the deal, “THE Alliance” members are permitted to share vessels, charter and exchange space on each other’s ships and enter cooperative working arrangements.

The scope of the agreement applies only to trade lanes between the United States and other nations. Cargo moved by carriers in “THE Alliance” that does not originate or terminate in the United States isn’t covered by this agreement.

Attorneys for “THE Alliance” submitted the application to establish the agreement to US authorities on Nov. 4, after which the Maritime Commission made no requests for additional information, thereby clearing the way for the agreement to come into force within the initial 45-day review period.
The Commission said its members’ vote to allow the agreement to become effective followed “a period of substantive and constructive discussion” with the parties.

“I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information sharing and joint procurement,” Federal Maritime Commission Chairman Mario Cordero said. “This office will continue to carefully focus on the impacts of the carrier alliance restructuring that is taking place in the shipping industry.”