Dive Brief:
- Federal Maritime Commissioner Rebecca Dye reassured members of the National Industrial Transportation League (NITL) in San Diego that freight increases are unlikely as a result of the reduction in shipping lines, American Shipper reported last week.
- Ms. Dye qualified her remarks by citing the possible economic impact line mergers may have, which could counterbalance rate decreases.
- The primary responsibility of the FMC is to provide legal oversight over alliances in order to preserve fair competition. Dye stated that the Commission is "pro-competition," designed to enable the market place to determine economic outcomes.
Dive Insight:
In the wake of continued shipping line consolidation, shippers are increasingly fearful that the low rates they're currently enjoying will rise unfairly.
However, the necessity of consolidation has more to do with survival in a time of overcapacity than any scheme to fix prices. In fact, the FMC has previously addressed the issue, assuring shippers that lines are joining forces in order to share resources and to buoy each other's capacities when bankruptcies and acquisitions prevail.
What is needed then from the shippers' perspective is greater transparency about pricing, especially as rates will inevitably rise to adjust for other economic factors. The ability to track pricing and rely on quotes is a requirement for doing good business — one that the shipping industry must abide and embrace. Then, as Dye stated in her presentation, the FMC can continue to fulfill its role to promote fair competition through oversight and analysis.
