Federal Maritime Commission has shippers’ back

THE Alliance announced its port rotations today as well as the inclusion of a “unique contingency plan” should a member of THE Alliance suffer a bankruptcy.

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As noted in LM recently ocean cargo shippers are being advised to mitigate risks this year by choosing a variety of ocean carriers and alliances.

Indeed, Esben Christensen, Managing Director at AlixPartners insists that shippers should avoid “coast concentration” in deployments., as well.

Fortunately the Federal Maritime Commission is on the same page. They tell us that the initiative undertaken by THE Alliance carriers to keep the goods moving for shippers and other stakeholders in the event of a carrier member becoming insolvent is a step in restoring confidence after the Hanjin bankruptcy.

THE Alliance announced its port rotations this week as well as the inclusion of a “unique contingency plan” should a member of THE Alliance suffer a bankruptcy. THE Alliance statement, says the five member lines (Hapag-Lloyd of Germany, “K”Line of Japan, Mitsui O.S.K. Lines of Japan, Nippon Yusen Kaisha of Japan, and Yang Ming of Taiwan) will establish an independent trustee to manage funds to be used in case there is insolvency within the group.

According to David J. Tubman, Jr. Counsel to FMC Commissioner William P. Doyle, it is envisioned that the fund will be used to continue alliance operations in the event of insolvency of one or more member lines. The independent trust fund will guarantee that customers’ cargo on board the affected members’ ships will be carried to the port of destination.

"I welcome this initiative undertaken by THE Alliance carriers to shippers and other customers in the event a carrier member becomes insolvent,” says Commissioner William Doyle.

"The Hanjin bankruptcy served as a wakeup call to carriers, shippers, and government authorities. THE Alliance’s efforts to create a mechanism to keep cargo and commerce flowing in the event of another carrier bankruptcy demonstrates that carriers and alliances have heard the concerns of the shipping public and are working to create commercial solutions to address those concerns," he adds. "It is far better for the private sector to develop their own commercial safeguards in an industry as complex as shipping, than to have governments come in and dictate regulations."


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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