Opening Statement of Commissioner Max Vekich at Informal Hearing of the Federal Maritime Commission Examining Impacts to Shipping Resulting from Current Conditions in the Red Sea and Gulf of Aden Regions

I would like to commend the carriers for prioritizing mariner safety during this most difficult time. We recognize the difficulties – the stress to the individual mariners, vessel owners and to the supply chain created by the current crisis in the Red Sea.

Carriers are employing novel solutions to adjust to constantly changing circumstances with broad impacts throughout the supply chain. We applaud them for their efforts to keep the cargo moving.

I am also looking forward to hearing from the shippers. We understand that the Red Sea crisis has, in many ways, upended the supply chain – yet again. While there will be additional costs incurred by rerouting vessels, we must ensure that the costs that are passed along are done so reasonably.

We have seen the implementation of additional surcharges, war-risk premiums, general rates increases and skyrocketing spot rates. We have also heard of the additional estimated costs for re-routing vessels around the Cape of Good Hope and of adding vessels to a string to make up for the additional time at sea.

At this point, we are in an information gathering mode and welcome the views of all segments of the industry. At the end of the day, we will be watching to ensure that the additional costs passed along to shippers remains in line with the actual increased costs incurred by the carriers as they adjust their supply chains to these unprecedented attacks on commercial shipping by non-state actors.

Max Vekich 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.