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US, China agree to ease shipping constraints

US, China agree to ease shipping constraints

Chinese maritime officials have agreed to work more closely with the United States to handle issues that could slow American efforts to boost exports, but poor U.S. port facilities must also be improved, an official said Friday.
The two sides agreed to open a dialogue about differences in regulations and other issues affecting maritime shipping, which accounts for more than 90 percent of all U.S. trade, U.S. Federal Maritime Commission Chairman Richard A. Lidinsky said.
Differences over administrative and regulatory requirements and charges were among the issues Lidinsky said he raised with his hosts.
While he was encouraged by those meetings, he said recent advances at Asian ports, some of the world's largest and most modern, were daunting.
He said aging U.S. facilities must be upgraded to meet President Barack Obama's goal of doubling American exports in the next five years.
"The infrastructure we see out here to support world trade is absolutely amazing," Lidinsky said. "You can sit in the U.S. and talk about it. But seeing it brings home the effort we have to bring to balance the supply chain. For our country, it's a vital goal to meet."
Ship owners lost a combined $20 billion in 2009, their worst year ever, and might have lost more if they had not withdrawn about 600 container vessels from service, in effect driving rates higher. In the meantime, container makers, mostly located in China, cut back sharply on output as trade slumped in 2008 and are hard pressed now to keep up with demand.
The massive reductions and other moves by ocean shippers raised complaints, leading the Federal Maritime Commission and European authorities to investigate.
Under a 1916 U.S. law, shippers are allowed "antitrust immunity" to collaborate in setting rates but not in controlling capacity. The law was meant to enable shippers to keep fees high enough to entice European carriers to increase services to the U.S. Ending that immunity is among reforms proposed in Congress.
The Europeans ended similar policies of their own two years ago. But the reform has a ways to go before it will be enacted in the U.S., Lidinsky said.
"It's a long shot to get it through in this session," he said.