Statement from Commissioner Maffei on the NYSHEX Agreements

I currently have no specific reason with regard to section 6(g) of the Shipping Act to object to the two NYSHEX agreements entering into force. But since this is unlike any other agreement I have seen, it gives me pause.

Under the agreements, several ocean carriers are authorized to (1) develop, manage, market and operate a digital freight contracting process, and (2) agree on language and terms to be included in the NYSHEX “Forward Contract”, which will be used by the carriers when contracting with a shipper via NYSHEX.

These agreements are neither cooperative operational nor rate discussion agreements, but instead provide a platform for parties to sell space to be used at a future time. The contracts between regulated carriers and shippers will have aspects of both a forward contract and a futures contract. This raises questions as to how the contracts will fit within and impact the shipping industry. Let me be clear, I strongly support innovative efforts to improve international commerce coming to and from the United States. I also want to state that the NYSHEX administration has been very cooperative with the Commission and my vote should in no way be seen as a negative reflection on their efforts or the ongoing viability of their product.

That said, I also want to be faithful to the Commission’s mission of protecting shippers and the public. Additionally, I believe there may be jurisdictional issues given the nature of “Forward Contract” and that other Federal government agencies may have equities in this matter.

Considering the above, I believe that it would be prudent to issue a Request for Additional Information (RFAI) and give this matter further consideration. As that was not the recommendation, I voted to disapprove.