The Federal Maritime Commission (FMC) regularly participates in the Global Maritime Regulatory Summit with counterparts from the European Union and the People’s Republic of China to discuss competition issues related to the shipping industry. Over the past twelve years, discussions have focused on critical issues such as COVID-19’s impact on supply chains, port operational efficiencies, and fair business practices to crack down on corruption in the maritime industry. Today’s maritime sector, however, faces two significant threats: Chinese influence and Iran’s shadow fleet. I plan to address these challenges at the next Global Maritime Regulatory Summit to ensure the most competitive, fair, and reliable global supply chain.
Chinese influence, driven by strategic initiatives like the Belt and Road Initiative, poses concerns about questionable financial practices that heavily influence global shipping. Through these initiatives, China invests in foreign ports, shipping lines, and financial institutions, from the Atlantic to the Pacific. Reports indicate that Chinese state-owned enterprises now control or operate terminals in over 90 ports worldwide. This level of control not only threatens market competition but poses long-term risks to U.S. economic security.
To counter these developments, the United States must continue to invest in global port infrastructure to ensure a reliable supply chain that competes with China’s Belt and Road Initiative.
Equally concerning is Iran’s ongoing use of a hidden network of vessels – commonly referred to as the “shadow fleet” – to evade international sanctions. Despite recent efforts to de-flag more than 40 Iranian-linked vessels, Iran still generates an estimated $30-40 billion annually through illicit oil exports. Shutting down the networks and supply chains that enable Iran to make money from oil exports will be instrumental in changing the regime’s behavior.
I applaud the U.S. Department of the Treasury and the U.S. Department of State for taking action against ships and entities involved in smuggling Iranian oil and related products. It is past time to close the world’s oceans to Iranian oil and the shadow fleet that transports that commodity and other sanctioned cargo.
The Federal Maritime Commission can play an important role in addressing the negative impacts of Chinese influence and Iran’s shadow fleet on global shipping. The United States must continue to invest in port infrastructure worldwide to remain competitive and ensure the reliability of the global supply chain. Our staff is actively reviewing areas to develop proposed measures pursuant to the statutes the FMC administers, including section 19 of the Merchant Marine Act of 1920, to address crucial maritime chokepoints and Iran’s shadow fleet. The Commission is charged with identifying and remedying unfavorable shipping conditions in U.S. foreign trade, and I intend to support initiatives that address such conditions with the necessary measures to ensure that U.S. maritime interests remain secure and competitive.
Chairman Louis E. Sola 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.