Maritime Commission Probes Ship Lines’ Asia Cargo Limits

The Federal Maritime Commission began a formal investigation Monday into whether shipping lines are unlawfully limiting vessel space for smaller shippers’ cargo eastbound across the Pacific Ocean.

The probe comes in response to complaints from shippers, particularly common carriers or consolidators that don’t operate their own vessels. They say ship lines are denying them space on U.S.-bound ships in the transpacific market unless they agree to pay “significantly increased rates.”

“The entire commission is very concerned about these reports, which allege potentially unlawful activity on the part of the carriers at this peak shipping season,” commission Chairman Harold Creel Jr. said in a statement.

The investigation, to be headed by Commissioner Delmond Won, could lead to civil prosecution of ship lines, Creel said. The complaints come as U.S. retailers, anticipating a sales surge in November and December, are loading warehouses with foreign goods whose prices have dropped as a result of Asia’s currency devaluations.

The probe will look at the two largest U.S.-flag ship lines in the Pacific market, CSX Corp.’s Sea-Land Service and American President Lines, a subsidiary of Singapore-based Neptune Orient Lines Ltd. It will also look at Asian-based competitors.

The commission said the small shippers allege they are being forced to pay higher rates or “novel charges such as an ‘additional space protection surcharge’ or ‘container repositioning charge.’ ”

One problem is that there’s too much inbound cargo and too little ship capacity, the commission said. Goods are flowing to the U.S. because of the weakened Asian economies, the strong dollar and the holiday cargo surge. At the same time, there are fewer goods heading to Asia, and the commission is looking at whether that’s part of the reason for the higher fees.