Statement from Commissioner Maffei on Bankruptcy Amendment to THE Alliance
Commissioner Daniel B. Maffei released the following statement regarding the Federal Maritime Commission’s (FMC) vote to approve the bankruptcy amendment to THE Alliance, FMC Agreement No. 012439.
“The Hanjin bankruptcy was a wake-up call to many in the maritime industry. In the bankruptcy’s aftermath, one of the biggest challenges facing individual ocean carriers and ocean carrier alliances is how best to prepare and mitigate the impact of a future insolvency event should one occur.
“THE Alliance members have addressed that challenge by filing the amendment to THE Alliance Agreement that the Commission has unanimously voted to approve today. With this amendment, THE Alliance members have established a clear procedure that will apply should one of their members become financially distressed or insolvent. They have established a contingency fund that will be available to ensure the continued movement of boxes should such an event occur. While more steps and resources might be needed to effectively limit the collateral damage from another bankruptcy, THE Alliance should be commended for independently choosing to take this significant pro-active step.
“I know there has been some discussion on Capitol Hill about whether legislative action might be necessary to protect the shipping public from the potential undue harm that could arise out of another crisis such as the Hanjin bankruptcy. However, a solution within the industry would likely be preferable to adding any new requirement in legislation or regulation. Therefore, I encourage other carriers and alliances in the industry to follow the positive example of THE Alliance in having a plan in place to limit the damage to both themselves and the shipping public in the event of another major financial event.”
Daniel B. Maffei 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.