US opening investigation into container shipping choke points

“The Commission will investigate whether constraints in global maritime chokepoints have created unfavorable shipping conditions caused by the laws, regulations or practices of foreign governments or the practices of foreign-flag vessel owners or operators.”

FMC summarized the significance and threat potential of each location. It pointed out, for example, that in addition to geopolitical concerns at the Panama Canal, ship hijackings and robberies are a “significant concern” in the Malacca Strait between Malaysia and Indonesia; Russia is ramping up its military forces in the Northern Sea Passage, which provides a shortcut between Europe and Asia; and strict regulations are causing delays along the Singapore Strait.

Along the English Channel, “political developments, border controls, and customs checks add complexities, with the Channel’s proximity to sensitive areas between the U.K. and France sometimes leading to heightened security concerns,” the agency warned.

“Remedial measures the Commission can take in issuing regulations to address conditions unfavorable to shipping in U.S. foreign trade include refusing entry to U.S. ports by vessels registered in countries responsible for creating unfavorable conditions,” FMC stated.

Boston Consulting Group (BCG) raised concerns last year about geopolitical risks at three of the choke points to be studied by FMC – the Suez Canal, the Strait of Malacca and the Panama Canal – as well as the Strait of Hormuz that threaten global trade.

“These geopolitical risks could turn into a physical impossibility of moving goods to certain destinations,” wrote BCG Partner and Director Michael McAdoo in a February 2024 alert.

“In the short term it will extend lead times on goods. In the longer term, it is likely to make firms seek shorter supply chains because of the risk and higher capital costs associated with maritime transport.”

FMC said it welcomes comments, due May 13, from government authorities and container shipping interests as well as bulk cargo interests, vessel owners, individuals and groups.

It is particularly interested in comments that address:

• The causes, nature and effects, including financial and environmental effects, of constraints on the choke points.
• The extent to which constraints are linked to the laws, practices or actions of foreign governments.
• The extent to which constraints are attributable to the practices of owners or operators of foreign-flag vessels.
• The likely causes, nature and effects of any continued transit constraints during the rest of 2025.
• The best long- and short-term steps the FMC might take to alleviate transit constraints.
• Obstacles to implementing measures to alleviate the transit constraints, and how those barriers can be addressed.

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• Red Sea cargo diversions could affect 2024 holiday shipping

Click for more FreightWaves articles by John Gallagher.