[Federal Register Volume 90, Number 49 (Friday, March 14, 2025)]
[Notices]
[Pages 12158-12161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-04042]
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FEDERAL MARITIME COMMISSION
[Docket No. FMC-2025-0005]
Order of Investigation Into Transit Constraints at International
Maritime Chokepoints
AGENCY: Federal Maritime Commission.
ACTION: Order of investigation and request for comments.
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SUMMARY: The Federal Maritime Commission (Commission) has exercised its
statutory authority to initiate a nonadjudicatory investigation into
transit constraints at international maritime chokepoints, particularly
concerning the effects of the laws, regulations or practices of foreign
governments, and the practices of owners or operators of foreign-flag
vessels, on shipping conditions in these chokepoints.
DATES: Submit comments on or before May 13, 2025.
ADDRESSES: You may submit comments, identified by Docket No. FMC-2025-
0005, by the following method:
Federal eRulemaking Portal: Your comments must be written and in
English. You may submit your comments electronically through the
Federal Rulemaking Portal at www.regulations.gov. To submit comments on
that site, search for Docket No. FMC-2025-0005 and follow the
instructions provided.
FOR FURTHER INFORMATION CONTACT: For questions regarding submitting
comments or the treatment of confidential information, contact David
Eng, Secretary; Phone: (202) 523-5725; Email: Secretary@fmc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
Based on available information, it appears that constraints on
transits
[[Page 12159]]
through the English Channel, the Malacca Strait, the Northern Sea
Passage, the Singapore Strait, the Panama Canal, the Strait of
Gibraltar, and the Suez Canal may have created shipping conditions that
call for careful consideration by the Federal Maritime Commission
(Commission) in connection with the determination of its policies and
the carrying out of its duties. The Commission has a statutory mandate
to monitor and evaluate conditions affecting shipping in U.S. foreign
trade. 46 U.S.C. 42101. Section 42101(a) provides that the Commission
``shall prescribe regulations affecting shipping in foreign trade . . .
to adjust or meet general or special conditions unfavorable to shipping
in foreign trade,'' when those conditions are the result of a foreign
country's laws or regulations or the ``competitive methods, pricing
practices, or other practices'' used by the owners, operators, or
agents of ``vessels of a foreign country.''
The Commission will conduct this investigation in accordance with
its procedures for a nonadjudicatory investigation set forth in 46 CFR
part 502, subpart R.
II. Summary of Apparent Conditions
Recent events have indicated that transit constraints at several
critical points in the global shipping supply chain have led to
conditions that are appropriate for the Commission to investigate. Such
constraints have affected transits through the English Channel, the
Malacca Strait, the Northern Sea Passage, the Singapore Strait, the
Panama Canal, the Strait of Gibraltar, and the Suez Canal. The
significance of these chokepoints is described below.
(A.) English Channel
The English Channel, with its narrow width of 21 miles and heavy
traffic, experiences congestion, limited passing opportunities, and an
elevated risk of collisions, especially near busy ports like Dover and
Calais.\1\ Navigational challenges are compounded by strong tidal
currents, variable weather conditions, and hazards such as shallow
areas and sandbanks, requiring precise maneuvering. The region's strict
environmental regulations, geopolitical tensions, security risks, and
ongoing issues like smuggling and illegal migration can further cause
delays and disruptions. Additionally, political developments, border
controls, and customs checks add complexities, with the Channel's
proximity to sensitive areas between the UK and France sometimes
leading to heightened security concerns.
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\1\ Squire, David, The Hazards of Navigating the Dover Strait
(Pas-de-Calais) Traffic Separation Scheme, Journal of Navigation
(May 2003), https://www.researchgate.net/publication/231921002_The_Hazards_of_Navigating_The_Dover_Strait_Pas-de-Calais_Traffic_Separation_Scheme.
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(B.) Malacca Strait
The Malacca Strait, with its narrow width, shallow areas, and
limited navigational infrastructure in remote sections, presents
significant challenges for large vessels, particularly in low
visibility or harsh weather conditions such as monsoons, storms, and
strong currents. These factors increase the risk of accidents and
restrict the passage of deep-draft vessels. The high traffic volume,
especially during peak seasons, leads to congestion, delays, and
limited passing opportunities, further heightening the risk of
accidents. Piracy, including hijackings and robberies, remains a
significant concern, particularly in remote areas, while regional
political instability and territorial disputes create additional
security risks and potential disruptions \2\ to transit.
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\2\ Interview on Geoeconomic Crossroads: The Strait of Malacca's
Impact on Regional Trade, The National Bureau of Asian Research
(Oct. 5, 2023), https://www.nbr.org/publication/geoeconomic-crossroads-the-strait-of-malaccas-impact-on-regional-trade/.
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(C.) Northern Sea Passage
The Northern Sea Passage is emerging as a critical maritime
chokepoint as new shipping routes open, a development that could
reshape global trade patterns. As the region's waters become ice-free
for longer periods, the Northern Sea Passage offers a shortcut between
Europe and Asia, reducing travel time and fuel consumption. However,
this has sparked competition over governance, with Russia seeking
control over the shortest maritime route between Europe and Asia, and
imposing fees, while other nations push for international access. The
Northern Sea Passage's strategic importance is further amplified by
increased military activity from Russia and China, including new bases
\3\ and icebreakers,\4\ reflecting its growing value for nuclear
deterrence and missile defense. As a result, both Russia and NATO
forces are ramping up their military presence, increasing the potential
for tensions and conflicts \5\ over access to the region's trade routes
and resources.
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\3\ Laws, Jasmine, Map Shows Locations of NATO and Russian
Military Bases in the Arctic, Newsweek (Feb. 3, 2025, 4:57 a.m.),
https://www.newsweek.com/nato-russias-military-bases-Northern-Sea-Passage-map-2022961.
\4\ Shkolnikova, Svetlana, Russia and China Conducting Joint
Arctic Operations for First Time, Coast Guard Says, Stars and
Stripes (Nov. 14, 2024), https://www.stripes.com/branches/coast_guard/2024-11-14/coast-guard-arctic-icebreakers-russia-china-15849293.html.
\5\ Grady, John, Risks of Military Confrontation in Artic
Increasing, Say U.S. and Russian Officials, USNI News (Dec. 25,
2024, 3:41 p.m.), https://news.usni.org/2024/12/25/risks-of-military-confrontation-in-arctic-increasing-say-u-s-and-russian-officials.
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(D.) Singapore Strait
The narrow Singapore Strait presents significant challenges for
maritime navigation, with limited passing opportunities that increase
delays and the risk of accidents, particularly for large vessels that
require precise navigation in congested areas. Shallow zones restrict
the passage of deep-draft vessels, necessitating careful maneuvering to
avoid grounding.\6\ The Strait is also subject to unpredictable weather
conditions, including heavy rains, storms, and strong currents, which
can slow vessel movement and complicate navigation, especially for
larger ships. Environmental risks such as oil spills, marine pollution,
and stringent regulations further constrain passage and cause delays.
Although piracy has decreased, the Strait still faces security threats,
including hijackings and robberies \7\ in remote areas, along with
potential disruptions due to regional political tensions.
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\6\ IMO Navigation Rules at Straits of Malacca and Singapore,
International Register of Shipping (Dec. 7, 2019), https://intlreg.org/2019/12/07/imo-navigation-rules-at-straits-of-malacca-and-singapore/.
\7\ Marcus Hand, Multiple Groups of Robbers Targeting Ships in
Singapore Strait, Seatrade Maritime (Mar. 3, 2025), https://www.seatrade-maritime.com/piracy/multiple-groups-of-robbers-targeting-ships-in-singapore-strait.
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(E.) Panama Canal
While the Panama Canal underwent a major expansion in 2016 with the
addition of a third set of locks to accommodate ``New Panamax''
vessels,\8\ it still faces significant capacity limitations and cannot
accommodate the largest ships, such as ultra-large container vessels.
During periods of high demand, congestion leads to delays, causing
costly disruptions to global supply chains.\9\ The canal relies on
freshwater from nearby lakes to operate its locks, and prolonged
droughts, exacerbated by unpredictable rainfall patterns, can
significantly
[[Page 12160]]
reduce available water levels, impacting its functionality and
efficiency. These environmental factors increase the canal's
vulnerability to operational disruptions, especially during dry spells.
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\8\ Kahuina Miller, and Tetsuro Hyodo, Impact of the Panama
Canal Expansion on Latin American and Caribbean Ports: Difference in
Difference (DID) Method, Journal of Shipping and Trade (July 8,
2021). https://jshippingandtrade.springeropen.com/articles/10.1186/s41072-021-00091-5#.
\9\ Drought at the Panama Canal delays energy shipments,
increasing shipping costs, U.S. Energy Information Administration
(Oct. 23, 2023), https://www.eia.gov/todayinenergy/detail.php?id=60842#.
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The Panama Canal also holds substantial geopolitical importance,
crucial to the interests of the United States. Political instability or
disruptions in its operation could have far-reaching consequences.
Panama's Ship Registry is one of the world's largest ship
registries with over 8,000 vessels reportedly registered under the
Panamanian flag. 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. See 46 U.S.C. 42107.
(F.) Strait of Gibraltar
The Strait of Gibraltar, at just eight miles wide, is one of the
world's busiest shipping lanes, with heavy traffic and limited space
for large vessels, raising the risk of collisions, congestion, and
delays, especially during peak periods.\10\ Navigational challenges
such as strong currents, winds, and fog further complicate passage,
while environmental risks like oil spills and pollution, along with
strict regulations, create additional constraints. Geopolitical
tensions between Spain, Morocco,\11\ and issues surrounding the status
of Gibraltar, along with piracy and smuggling, contribute to security
concerns and potential disruptions in the region.
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\10\ Container Ship and Oil Tanker Collide in Strait of
Gibraltar, Containerlift (Dec. 4, 2024), https://www.containerlift.co.uk/container-ship-and-oil-tanker-collide-in-strait-of-gibraltar/.
\11\ Spain and Morocco: Spain's permissiveness towards its
southern neighbor, University of Navarra, Global Affairs and
Strategic Studies (Apr 19, 2023), https://en.unav.edu/web/global-affairs/espana-y-marruecos-la-permisividad-espanola-ante-el-vecino-del-sur.
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(G.) Suez Canal
The Suez Canal, handling between 10% and 12% of global trade,\12\
is one of the busiest waterways in the world. Its narrow width and
single-lane format often leads to delays, especially during peak
seasons. Events such as the 2021 Ever Given blockage highlighted the
canal's vulnerabilities, causing massive trade disruptions,\13\ while
its shallow depth makes it prone to weather-related issues, further
increasing the risk of accidents. The canal's strategic importance also
makes it a focal point for geopolitical tensions, including conflicts
involving the Houthis and the Gaza Crisis,\14\ as well as threats from
piracy and terrorism. Additionally, environmental concerns have arisen
due to the potential spread of invasive species by ships passing
through the waterway.
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\12\ The Importance of the Suez Canal to Global Trade, New
Zealand Ministry of Foreign Affairs and Trade, (Apr. 18, 2021),
https://www.mfat.govt.nz/en/trade/mfat-market-reports/the-importance-of-the-suez-canal-to-global-trade-18-april-2021#.
\13\ Natasha Turak, Suez Canal Blockage Could Cause Problems for
the Globe: Here's What You Need to Know, CNBC (Mar. 25, 2021),
https://www.cnbc.com/2021/03/25/suez-canal-cargo-ship-blockage-could-cause-problems-for-the-globe.html.
\14\ Kamali et al., Red Sea Attacks Disrupt Global Trade,
International Monetary Fund, IMFBlog (Mar 7, 2024), https://www.imf.org/en/Blogs/Articles/2024/03/07/Red-Sea-Attacks-Disrupt-Global-Trade.
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(H.) Other Transit Constraints
The Commission notes that other significant constraints affecting
U.S. shipping may arise quickly in the global maritime environment. For
example, when the Singapore-flagged containership Dali struck a bridge
in Baltimore, Maryland in March 2024, six people were killed and
maritime access to the Port of Baltimore was blocked, a situation that
persisted for many weeks and led to losses that have been estimated to
reach as high as $4 billion.\15\
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\15\ Campbell Robertson and Peter Eavis, Justice Department
Files $100 Million Claim in Fatal Baltimore Bridge Collapse, N.Y.
Times (Sept. 18, 2024), https://www.nytimes.com/2024/09/18/us/justice-department-suit-baltimore-bridge-collapse.html; Jane Byron,
The Baltimore bridge collapse: a $4 billion question, Lockton (July
9, 2024) https://global.lockton.com/news-insights/the-baltimore-bridge-collapse-a-4-billion-question.
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(I.) Initiation of Investigation
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. The
Commission ``has extensive regulatory duties under the various acts it
is charged with administering,'' and conducting investigations is
``essential to the proper exercise'' of those duties.'' 46 CFR 502.281.
In particular, the Commission is authorized to initiate investigations
on its own motion ``when in its discretion the Commission determines
that information is required for the purpose of rulemaking or is
necessary or helpful in the determination of its policies or the
carrying out of its duties, including whether to institute formal
proceedings directed toward determining whether any of the laws which
the Commission administers have been violated.'' 46 CFR 502.282. Among
the Commission's duties are to identify in its annual report to
Congress ``any otherwise concerning practices by ocean common
carriers'' with certain characteristics identified by Congress. 46
U.S.C. 46106(b)(7). Accordingly, the Commission, upon issuing an Order
of Investigation, may authorize its representatives to conduct such an
investigation; may hold investigational hearings; may issue orders or
subpoenas to gather testimony or documentary evidence; may order that
testimony be taken by deposition; and may order the filing of reports
or answers to written questions. 46 CFR 502.283 through 502.288; see
generally 46 CFR part 502, subpart R (Nonadjudicatory Investigations).
At the early stage of the investigation, the Commission will focus
on providing a route for interested parties to provide information,
perspectives, and proposed solutions. Discussion of remedial measures
or any other actions, if needed, would occur later in the process, and
would be accompanied by the opportunity for additional public comment.
III. Investigation and Initial Request for Comments
The Commission has determined that the above-described situation
meets the threshold requirements for consideration under the relevant
regulatory authority. See 46 CFR part 502, subpart R. The Commission
has therefore determined to initiate an investigation. See 46 CFR
502.282. The Commission has designated its General Counsel to lead the
investigation. The General Counsel will update the Commission quarterly
on the status of constraints in the maritime chokepoints identified
herein, as well as any similar issues that may arise, and may propose
that the Commission initiate one or more specific proceedings under 46
U.S.C. 42101 and related statutes. To that end, the Commission issues
this Order of Investigation. See 46 CFR 502.283.
Interested persons are requested to submit written comments
containing experiences, arguments, and/or data relevant to the above-
described maritime chokepoints, particularly concerning the effects of
laws, regulations, practices or other actions by foreign governments,
and/or the practices of owners or operators of foreign-flag vessels, on
shipping conditions in these chokepoints. The Commission's jurisdiction
under 46 CFR 502.282 is broad, and the agency welcomes comments not
only from
[[Page 12161]]
government authorities and container shipping interests, but also from
tramp operators, bulk cargo interests, vessel owners, individuals and
groups with relevant information on environmental and resource-
conservation considerations, and anyone else with relevant information
or perspectives on these matters.
In particular, the Commission welcomes information and perspectives
on the following:
1. What are the causes, nature, and effects, including financial
and environmental effects, of constraints on one or more of the
maritime chokepoints described above?
2. To what extent are constraints caused by or attributable to the
laws, regulations, practices, actions, or inactions of one or more
foreign governments?
3. To what extent are constraints caused by or attributable to the
practices, actions, or inactions of owners or operators of foreign-flag
vessels?
4. What will likely be the causes, nature, and effects, including
financial and environmental effects, of any continued transit
constraints during the rest of 2025?
5. What are the best steps the Commission might take, over the
short term and the long term, to alleviate transit constraints and
their effects?
6. What are the obstacles to implementing measures that would
alleviate the above transit constraints and their effects, and how can
these be addressed?
As the Commission proceeds with this investigation, it may
determine to request additional comment or gather information through
other means as authorized under 46 CFR part 502, subpart R.
By the Commission.
David Eng,
Secretary.
[FR Doc. 2025-04042 Filed 3-13-25; 8:45 am]
BILLING CODE 6730-02-P