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US launches probe into Suez Canal, other global shipping chokepoints: The US Federal Maritime Commission (FMC) has launched an investigation into global maritime chokepoints, including the Suez Canal, to assess whether foreign governments or shipping operators are creating conditions unfavorable to US shipping and trade, according to an investigation order published on the Federal Register.
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A broader look at global trade disruptions: “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 investigation order read.
Why the Suez Canal? The waterway — which handles 10-12% of global trade — is a focal point of concern for the US administration, because “its narrow width and single-lane format often leads to delays, especially during peak seasons,” according to the FMC. The commission also pointed out that its shallow depth “makes it prone to weather-related issues, further increasing the risk of accidents,” citing the 2021 Ever Given crisis. The commission also highlighted security risks stemming from ongoing conflicts, including that involving the Houthis and the war in Gaza, on top of “threats from piracy and terrorism,” the document read.
What could this mean: A former FMC lawyer told Bloomberg that the FMC has been given the authority to take corrective action if the investigation proves unfavorable conditions in shipping. The corrective action could include a USD 1 mn fee per voyage, which could limit “firms’ ability to participate in FMC-filed agreements like alliances, or blocking foreign-flagged vessel access to US ports,” she said.
What’s next? The commission is seeking comments until 13 May regarding the causes of constraints in the mentioned checkpoints.
