The regulation of international ocean common carriage in the United States will reach its 100th anniversary in 2016. Today, U.S. ocean liner commerce is dependent on foreign-controlled ships and terminals. As a result, effective regulation to ensure a fair, efficient, reliable and secure international U.S. liner shipping system is more relevant than ever. The statutory regime that governs liner shipping in the U.S. has changed several times since the original Shipping Act was enacted in 1916, and rules that implement the shipping statutes are regularly reviewed for continued relevancy and effectiveness. In the first half of this year, for example, industry participants will have an opportunity, through two separate advanced notices of proposed rule-making, to comment on proposed revisions to current rules that govern service contracts and non-vessel-common carrier service arrangements, as well as ocean carrier and marine terminal operator agreements.
While nearly all of the major ocean carriers have coalesced into less than a handful of alliances that operate global networks, approaches to liner shipping regulation differ around the world. This calls for greater cooperation and coordination among the regulatory agencies charged with overseeing alliance activities.
Ocean freight rates generally seem set to weaken further, along with the carriers’ financial conditions. Falling fuel costs brought some comfort to carriers this past year, but their economic environment could worsen in 2016 before it gets better, depending on what happens to fuel costs and lackluster global economic growth. Carrier cost-cutting will no doubt continue, but perhaps focus on some new areas; alliance members may decide to work more closely on land-side cost-saving opportunities, for example. In the recent past, carriers formed new alliances or expanded the membership of existing ones to help fill the big ships that promise lower unit operating cost and fewer environmentally damaging emissions. This year, however, some carrier mergers and acquisitions seem probable, which could cause the global alliances to restructure memberships and networks.