Commissioner Doyle supports alliance efforts to protect shippers in the event of carrier insolvency
THE Alliance announced its port rotations today as well as the inclusion of a “unique contingency plan” should a member of THE Alliance suffer a bankruptcy. According to THE Alliance statement, the five member lines (Hapag-Lloyd of Germany, “K”Line of Japan, Mitsui O.S.K. Lines of Japan, Nippon Yusen Kaisha of Japan, and Yang Ming of Taiwan) will establish an independent trustee to manage funds to be used in case there is insolvency within the group. It is envisioned that the fund will be used to continue alliance operations in the event of insolvency of one or more member lines. The independent trust fund will guarantee that customers’ cargo on board the affected members’ ships will be carried to the port of destination.
“I welcome this initiative undertaken by THE Alliance carriers to assist shippers and other customers in the event a carrier member becomes insolvent. The Hanjin bankruptcy served as a wakeup call to carriers, shippers, and government authorities. THE Alliance’s efforts to create a mechanism to keep cargo and commerce flowing in the event of another carrier bankruptcy demonstrates that carriers and alliances have heard the concerns of the shipping public and are working to create commercial solutions to address those concerns. It is far better for the private sector to develop their own commercial safeguards in an industry as complex as shipping, than to have governments come in and dictate regulations.”
William P. Doyle is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.