Focus | China, U.S., and EU Hold Emergency Summit—Will the 'Sky-High Ocean Freight Rates' Finally Cool Down?

On September 8, the official website of the U.S. Federal Maritime Commission (FMC) announced that maritime regulatory authorities from China, the United States, and the European Union convened a Global Shipping Regulation Summit. According to the announcement, the meeting addressed several high-profile issues: 1. Analysis of demand and supply in international ocean shipping following the outbreak of the COVID-19 pandemic; current challenges confronting the ocean shipping industry; and underlying causes of the industry’s difficulties. 2. Responses taken thus far by relevant jurisdictions and regulatory authorities to the aforementioned events—and their outcomes. 3. Potential future measures that could restore the ocean shipping industry to normal operations. FMC Chairman Daniel Maffei stated: "The abnormally high levels of ocean freight rates and container prices have drawn widespread attention from global regulators, legislators, and the public." Notably, on September 9, CMA CGM—the world’s third-largest ocean carrier, headquartered in France—issued a major official statement announcing it would freeze spot container freight rates through February 1, 2022. CMA CGM emphasized that, amid unprecedented conditions facing the shipping industry, it prioritizes long-term relationships with its customers. With regulators stepping in and carriers freezing rates, will sky-high ocean freight rates finally reach a turning point? Regulators Focus on 'Sky-High' Freight Rates On September 8, at the Fifth Multilateral Forum of the Global Regulatory Summit, FMC Chairman Daniel B. Maffei, along with representatives from the European Union and China, discussed current matters related to international transportation. Daniel Maffei noted that global regulators, legislators, and the public are all closely watching the record-breaking demand faced by ocean carriers—and the sharply rising costs of containerized shipping. This Global Regulatory Summit provided an opportunity for agencies responsible for regulating container shipping to exchange observations about market developments under their respective regulatory and enforcement regimes—and to discuss how best to respond to carriers’ pricing adjustments. Daniel Maffei commended the EU for convening this meeting and providing a valuable forum for information exchange. The delegations agreed to hold the next Global Regulatory Summit in Beijing in 2023. The EU delegation was led by Henrik Mørch, Director for Transport, Postal Services and Other Services at the Directorate-General for Competition. China’s delegation was headed by Li Tianbi, Director of the Water Transport Bureau at the Ministry of Transport. Commissioners Rebecca F. Dye, Michael A. Khoury, and Carl W. Bentzel also represented the FMC at the summit. World’s Third-Largest Carrier Freezes Freight Rate Quotations Beyond regulatory action, ocean carriers themselves are attempting to stabilize freight rates. Recently, French carrier CMA CGM—the world’s third-largest ocean carrier—unexpectedly issued an official statement announcing it would freeze spot container freight rates through February 1, 2022. CMA CGM stated that, amid unprecedented conditions confronting the shipping industry, it places greater emphasis on long-term relationships with its customers. Since 2021, port congestion and severe imbalances between demand and effective container shipping capacity have driven spot container freight rates upward continuously. "Although these market-driven rates are expected to remain elevated over the coming months, the Group has decided to suspend further price increases across all services under its brand."

FMC Imposes Record-Breaking Fine

To address MSC’s abusive bill-of-lading clauses, the FMC invoked Section 41102(c) of Title 46 of the U.S. Code—the Shipping Act. Section 41302(a) of Title 46 of the U.S. Code (the Shipping Act) grants the FMC authority to investigate any conduct, fee, or charge it deems violative of the Act. As a common carrier, MSC is subject to regulation under the U.S. Shipping Act. Accordingly, the FMC possesses jurisdiction over this case and alleges that MSC engaged in conduct prohibited under Sections 41102(c) and 40501 of Title 46. The FMC is authorized to assess civil penalties against MSC for such violations and to issue cease-and-desist orders. As outlined above, the FMC’s imposition of an exceptionally large fine on MSC is both reasonable and lawful. Specific Case Examples In fact, the FMC has been actively issuing fines well before this case. For instance, on December 30, 2022, the FMC announced that Wan Hai Lines had imposed detention charges on at least 21 occasions during spring 2021, with invoice amounts ranging from $125 to $1,550 per container. It is widely known that, during the pandemic, truckers in the U.S. could deliver full containers but were unable to return empty ones to terminals—leaving them no choice but to store empties at low-cost locations. Wan Hai Lines used this situation as grounds to impose exorbitant detention fees. Ultimately, the FMC fined Wan Hai $950,000. Data further shows that since the enactment of the Ocean Shipping Reform Act (OSRA) 2022, the FMC has received over 200 formal complaints alleging improper charges. Following successful resolution of such complaints, carriers have refunded more than $700,000 in fees. Who Is the FMC? The U.S. Federal Maritime Commission (FMC), headquartered in Washington, D.C., was established on August 12, 1961. It exercises administrative rulemaking, quasi-judicial, and law enforcement functions, overseeing waterborne commercial activities—primarily containerized ocean shipping—with origins or destinations in the United States. The FMC is roughly equivalent to China’s Water Transport Bureau under the Ministry of Transport, combined with certain functions of a maritime tribunal. The FMC’s aggressive crackdown on major liner companies that profited enormously during the pandemic stems from deep-rooted motivations: 1. MSC earned $27 billion during the shipping boom of 2021 and 2022—amid U.S. inflation that surged from 2% to as high as 9%. The U.S. government was unwilling to let liner companies profit handsomely from fractured global supply chains. U.S. President Joe Biden directly accused container shipping companies of fueling the country’s rampant inflation in recent years. The Democratic president was so incensed that, during a speech at the Port of Los Angeles, he declared he wanted to “slap the face” of shipping companies. Consequently, President Biden empowered the Ocean Shipping Reform Act with expanded authority—granting the FMC enhanced regulatory powers over the shipping industry. 2. Long-Arm Statutes Long-arm statutes refer to laws enacted by certain U.S. states. Most U.S. states have statutory provisions granting their courts personal jurisdiction over individuals residing outside the state—hence the term ‘long-arm.’

FMC to take write-down of up to $675M in pricing overhaul

5 hours ago

FMC Corp. slashed its third-quarter revenue forecast and announced a $675 million write-down amid inventory backlogs and pricing pressures in agrochemical markets. The firm is overhauling its selling model to align prices with market realities and clear distributor stock.

chemweek

2026-10-17

FMC to take write-down of up to $675M in pricing overhaul

FMC to take write-down of up to $675M in pricing overhaul

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