US Probe of Maritime Chokepoints Sets Up Expanded Global Reach

(Bloomberg) — The Federal Maritime Commission is investigating global maritime chokepoints to assess whether a country, ocean carrier or other maritime operator are creating conditions unfavorable for US shipping and foreign trade.

“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,” the US agency said in a Federal Register notice published Friday.

“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 FMC said.

The move is one of several taken recently by the Trump administration related to the global maritime industry, including a US Trade Representative proposal aimed at curbing China’s dominance of the shipbuilding industry. 

“These authorities give the FMC the authority to take corrective action if they find unfavorable conditions in shipping,” said Lauren Beagen, a lawyer formerly at the FMC.

That could include fees of $1 million per voyage, potentially limiting firms’ ability to participate in FMC-filed agreements like alliances, or blocking foreign-flagged vessel access to US ports, Beagen noted. The investigation draws on authorities from the 1920 Merchant Marine Act as well as the Foreign Shipping Practice Act of 1988.

The investigation has the potential to impact a large share of the world’s commercial shipping fleet, said Beagen, CEO of e-learning platform The Maritime Professor. 

“This is arguably the most significant authority the FMC has,” said Beagen.  “It looks like they may be preparing to flex the muscles of that statutory authority with the just announced investigation.”

In addition to the English Channel, Malacca Straight and the Straight of Gibraltar, other maritime chokepoints under investigation include:

The Northern Sea Passage, which offers a shortcut between Europe and Asia and could reshape global trade as the region’s waters become ice-free for longer periods. “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 notice said.

The Panama Canal’s vulnerability to drought recently caused long wait times and costly disruptions for shippers. In addition to the risk of political instability or disruption at the canal, Panama has one of the largest ship registries, with 8,000 vessels reportedly registered under the country’s flag. The FMC said measures it could take “to address conditions unfavorable to shipping in US foreign trade include refusing entry to US ports by vessels registered in countries responsible.”

Large vessels transiting the Singapore Straight are especially vulnerable to grounding in shallow water, while unpredictable weather compounds challenges to maritime navigation. “Although piracy has decreased, the Strait still faces security threats, including hijackings and robberies in remote areas, along with potential disruptions due to regional political tensions.”

The Suez Canal is crucial for global trade, though its narrow width and single-lane often spur delays, especially in inclement weather. Any disruption to the canal — one of the busiest waterways in the world — can cause knock-on disruptions to global trade, as seen with the 2021 blockage by the Ever Given and the attacks on merchant vessels by Houthis over the last few years.

The FMC said it is seeking comment over the next 60 days on causes of constraints to the listed maritime chokepoints and to what extent those issues are caused by foreign governments or vessel owners or operators. 

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