02 Agustus 2014

[020814.EN.SEA] UASC Challenges FMC Rules Governing 'Controlled' Carriers


UNITED Arab Shipping Company has lodged a petition with the Federal Maritime Commission (FMC) to be exempted from the US government's rules concerning "controlled" carriers, after the government of Qatar become the major shareholder in UASC with 51.27 per cent.

The FMC currently classifies four shipping lines as "controlled" carriers, and still includes Hainan Pan Ocean Shipping despite the company halting its liner shipping operations to the US in July 2012.

The three remaining shipping lines, APL, Cosco and CSCL, have previously been granted exemptions by the FMC from the requirements of the controlled carriers act.

The requirements would force carriers to wait 30 days to lower their freight rates.

According to UASC's submission to the FMC, granting the exemption would allow the carrier to react quickly to market conditions and be more competitive, reported Alphaliner.

The controlled carrier rules were introduced to prevent state-owned ocean liners from manipulating freight rates through 'rate dumping' strategies to drive out their competitors.

Source : HKSG.

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