Tuesday, February 8, 2011

US Ocean Freight Subject To Government Enquiry On Slow Steaming

FMC Want Comments from Shippers and Forwarders
Shipping News Feature

US – Regulatory bodies in America are amongst the toughest in the world and now, like the eye of Sauron, the U.S. Federal Maritime Commission (FMC)has turned its attention to the effects of the slow steaming by container shipping lines and bulk freight carriers on the nations shippers and freight forwarding companies.

Full details of the FMC requirements and the scope of the study can be seen HERE but the basics are very simple. Since the disastrous slump in trade experienced by the worlds container carriers in particular two years ago, the liner operators settled on a policy which would not only reduce their ever rising fuel costs but could be presented, quite legitimately, as an environmental measure using less resources and producing less emissions, a subject which the industry was already under attack for, being considered a major polluter.

Obviously in selling the longer transit time to customers the lines commented that the new policy would result in reduced rates and bunker adjustment factors and that turnaround at container clearance depots would improve with the resultant reduction of congestion. The policy has been a major factor in the financial recovery of several of the world’s major lines and companies like Maersk have detailed potential cost benefits to their customers for the future.

The lines could also point to the US Government’s own requirements as the Environmental Protection Agency proposed new regulations last year demanding lower pollution levels. Now the Commission is requesting public comment on both the effect on supply chains and the cost to shippers plus the environmental impact of the policy.

The FMC point to statistics showing that more than half of the 45 weekly services operating between U.S. west coast ports and Asia are currently slow steaming, while more than 75% of the 15 weekly services operating between U.S. east coast ports and Asia are doing so. In contrast, just 20 percent of the 15 weekly services operating between the United States and North Europe are currently slow steaming.

The targets of this point are clearly members of the Transpacific Stabilization Agreement (TSA) which last year allowed its member lines to discuss and reach agreement on programmes to reduce sources of environmental pollution caused by ocean liner operations but avoided the subject of cost savings and fell short of detailing a precise policy, presumably in fear of breaching anti trust regulations.

The full list of questions to shippers can be seen at the link above and responses need to be submitted by the 5th April 2011 in writing to:

Karen V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol Street, NW., Room 1046, Washington, DC 20573–0001 USA

Or e-mail non-confidential comments to: secretary@fmc.gov

(e-mail comments as attachments preferably in Microsoft Word or PDF).

Further information can be obtained from:

Austin L. Schmitt, Director, Bureau of Trade Analysis, Federal Maritime Commission, 800 North Capitol Street, NW., Washington, DC 20573–0001 USA

Telephone: (202) 523–5796      E-mail: aschmitt@fmc.gov