24 May (Lloyd's List) - REGULATORS in the US and the European Union saw no evidence of carrier collusion or anti-competitive behaviour during the pandemic, despite some shipper claims of price gouging as freight rates escalated to record high levels.
Speaking at the European Maritime Law Organisation conference in London, Federal Maritime Commissioner Rebecca Dye said skyrocketing rates had been driven by market dynamics rather than carrier manipulation.
“During the study into the impacts of Covid that started in March 2020, I collaborated often with the European Commission and Henrik Morch, the head of transportation,” Dye said.
“Between us we have visibility into the largest markets in the world, Asia-Europe and Asia-North America. When everyone was shocked by the escalating prices, neither of us saw any problems in competition or reduction in competition among our ocean carrier partners.”
Dye said she had also had conversations with carrier chief executives that had convinced her that every effort was being made to provide capacity into the market when demand began to soar in the second quarter of 2020, rather than any effort to manipulate the market by withholding capacity.
“There has been a lot of interest in the problems related to the pandemic,” she said.
“I joke that I play being an expert in systems theory at the FMC. There is a system, and if you put through 20 units continually it works pretty well. But if you go from zero to 100, there is going to be chaos; the system does not work. As we know, our supply chains are complex systems, and that is what happened.
“When I started my investigation, I had conversations with several carrier chief executives and asked if this was going to be like 2010. They said it was deeper and wider, which prepared me for the long haul.”
Nevertheless, legislation had come out of the effects of the pandemic that had been “quite interesting”, Dye added.
“It is not directly related to the supply chain bottlenecks but rather dealing with problems that were presented to congress about certain behaviours of the carriers during this time,” she said.
“Right now, the FMC is working diligently to meet deadlines on several major rules on billing and the internationally despised demurrage and detention charges. As I consider my votes on these rules, I look for clarity and predictability to improve the system, without — and this is the hard part — an over-regulation that may have terrible unintended consequences and ultimately may not work.”
