The Federal Maritime Commission voted last week to allow an amendment to THE Alliance Agreement that permits establishing a contingency fund that can be used to help member carriers manage through, and recover from, the insolvency or financial distress of a participating line.

The amendment to THE Alliance was submitted on August 14, 2017, and the commission granted the request of petitioning parties for an expedited review. The amendment is effective immediately.

“THE Alliance sought this amendment to address marketplace issues and consumer concerns,” stated Federal Maritime Commission Acting Chairman Michael Khouri. “This amendment reflects the market process in action.”

THE Alliance Agreement is comprised of five container shipping lines: Hapag-Lloyd, K Line, MOL, NYK, and Yang Ming. Under the terms of the agreement, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements.

The amendment comes to prevent an insolvency and bankruptcy as happened last year with South Korea’s Hanjin Shipping. The development stranded billions of dollars worth of cargo at sea and took months to resolve.