The Federal Maritime Commission is interested in exploring a suggestion by agricultural shippers that establishing a container rate index for exports could be beneficial for U.S. shippers.
FMC Chairman Richard A. Lidinsky is scheduled to address the annual conferences of the National Customs Brokers and Forwarders Association of America April 24 in Hollywood, Fla., and the Agriculture Transportation Coalition June 21 in San Francisco, and the topic of an index for exports is expected to come up.
Container freight indexes are common in the inbound trades. For example, The Journal of Commerce each week publishes the Drewry Container Rate Benchmark for shipments from Hong Kong to Los Angeles, and the Shanghai Containerized Freight Index for shipments from China to the U.S. East and West coasts.
Agricultural exporters in recent months have suggested to the FMC that a similar index for export commodities could prove beneficial, Lidinsky told the House Committee on Transportation and Infrastructure on March 7. Lidinsky has made support for increased exports an important mission of the FMC.
The difference between the inbound freight indexes and the export index is that the outbound index would be based on information filed with the FMC. “Following requests from several agricultural exporters, our staff is currently exploring the concept of using our data on file to develop a container shipping rate index for a few targeted export commodities such as grains, cotton, hay and frozen meat,” Lidinsky told the committee.
The trade community has mixed views on developing an export index based on confidential service contract information on file at the FMC. Peter Friedmann, AgTC executive director, said carriers that are members of the Westbound Transpacific Stabilization Agreement already have the information, and they also have antitrust immunity to discuss the data at WTSA meetings.
Shippers do not have antitrust immunity, so having access to aggregated freight rates for various commodities could be beneficial when negotiating contracts with carriers. “It would give shippers better information for making decisions,” Friedmann said.
However, in a notice to its members, the NCBFAA said the prospect of the FMC making public service contract information that was negotiated in confidence between ocean carriers and their customers “raises significant questions that could affect both the activities of OTIs (ocean transportation intermediaries) as well as their customers.”
Lowry Crook, FMC chief of staff, said the commission’s interest in this subject is still in the early stages, and the FMC wants to hear from the trade before moving forward.
Friedmann said the FMC most likely would aggregate the service contract rates and make public an average rate. The commission would not make public the terms of individual contracts.
Before proceeding, the FMC may seek comments from the trade using a vehicle such as a formal notice of inquiry, Crook said. Oftentimes, such inquiries are launched only after the full commission has voted to do so.