FMC Acts On Mississippi Towage Arrangements

The International Association of Dry Cargo Shipowners (INTERCARGO) welcomes the news that the U.S Federal Maritime Commission (FMC) has agreed it has jurisdiction in the matter of Exclusive Towage Contracts issues in the lower Mississippi River. Accordingly, the FMC has issued a "show cause" order to the principal bulk terminals with such contracts. Roger Holt, Secretary-General of INTERCARGO said today, "This show-cause order requires the marine terminal operators to demonstrate why they believe they have not violated Shipping Act regulations - particularly those concerning anti-competitive practices. Over the summer months the terminals will have to supply the FMC with reasons why it should not issue a "cease and desist" order against them." Currently, dry cargo ship operators on the Mississippi are forced by terminal operators to sign contracts with towage companies nominated by the terminal operators. These agreements leave operators of ships trading on a voyage charter basis with no ability to negotiate terms and conditions. Mr Holt, added: "INTERCARGO, which has been working with both members and non-members to provide base data to the FMC and giving the initiative its full support, is delighted that the international maritime community has been able to co-operate on this issue. Owners, and more importantly operators who are disponent owners and who pay the towage expenses, now have the hope that these practices will be stopped and that they will see a future improvement in their bottom line operating expenses. We believe that the additional costs to shipowners and ship operators could be as much as $12 million per year. These extra expenses increase the cost of ocean freight and, moreover, the price of US agricultural exports."