U.S. Regulators Approve OCEAN Alliance

The proposed OCEAN Alliance of COSCO, CMA CGM, APL, Evergreen and OOCL received final approval from the U.S. Federal Maritime Commission on Friday, putting it one step closer to its planned startup next April.

“The agreement going into force represents a consensus of what will allow OCEAN Alliance carriers to achieve efficiencies without harming the marketplace,” said FMC Chairman, Mario Cordero. “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 [sic] common carriage, with the American shipping public foremost in mind."

The OCEAN Alliance members may now share slot capacity and vessels, and can enter into new cooperative arrangements in trade lanes to and from the U.S.

However, commissioner William P. Doyle said that under the FMC's approval conditions, the members will be limited in their ability to use their collective market power to negotiate contracts with marine terminal operators. In addition, they must sign their own individual contracts with stevedores, tugs, barges, chassis providers and other service providers. 

The commission had stalled the approval process in August in order to consider arrangements for contracting with American third party service providers. The revised language is comparable to that in 2M's alliance agreement, Doyle said. 

Commissioners Rebecca Dye and Michael Khouri voted against approval. 

When it goes into effect in April, the OCEAN Alliance is expected to hold more than one third of Asia-North America container capacity and nearly 40 percent of Asia-Europe, making it the biggest player in the two biggest trade routes.