BREAKING NEWS: OCEAN Alliance Approved by FMC - Global Trade Magazine
  October 25th, 2016 | Written by

BREAKING NEWS: OCEAN Alliance Approved by FMC

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  • FMC's approval of OCEAN Alliance followed an exhaustive review process.
  • Commissioners' request for additional information had the effect of stalling OCEAN Alliance approval.
  • OCEAN Alliance approval means carriers can share vessels and enter into cooperative working arrangements.

The Federal Maritime Commission (FMC) has concluded its review of the proposed OCEAN Alliance, allowing it to become effective on Monday, October 24, 2016.

The FMC’s announcement followed an exhaustive review process by the commission that examined all aspects of the proposed agreement to assure that competition in the ocean transportation industry would not suffer. Commissioners and commission staff extensively engaged filing counsel on a number of issues, and took advantage of the opportunity allowed for under the law to issue a Request for Additional Information, which necessitates the filing of further documentation in support of the application.

That development came in late August, when Commissioner William P. Doyle, joined by fellow commissioners Michael A. Khouri and Daniel B. Maffei, decided there were still some questions that needed answers. Their request for additional information had the effect of stalling the approval process until the participating carriers provided the requested information.

The OCEAN Alliance is comprised of COSCO Shipping, CMA CGM, Evergreen Marine, and Orient Overseas Container Line Limited (OOCL). With the FMC’s approval in hand, agreement members are now permitted to share vessels; charter and exchange space on each other’s ships; and, enter into cooperative working arrangements in international trade lanes between the United States and ports in Asia, Northern Europe, the Mediterranean, the Middle East, Canada, Central America, and the Caribbean.

“The Commission worked very hard to balance the needs of not only the OCEAN Alliance applicants, but all other parties involved in the intermodal supply chain, with the ultimate goal of safeguarding competition in international oceanborne common carriage, with the American shipping public foremost in mind,” said Federal Maritime Commission Chairman Mario Cordero. “The agreement going into force represents a consensus of what will allow OCEAN Alliance carriers to achieve efficiencies without harming the marketplace.”

The carriers have said that they would transition from their former alliances in March 2017 and begin full operation by April. The alliance said it will deploy increased ocean carrier services from Asia to U.S. east coast and gulf coast ports.

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