When Federal Maritime Commissioner (FMC) William P. Doyle spoke at this week’s FTR Transportation Conference in Indianapolis, he announced the THE Alliance would establish a $50 million “insolvency contingency fund,” to mitigate the risk of another ocean carrier bankruptcy or “catastrophic failure.”Doyle was among those commissioners who voted to expedite the FMC’s decision and support THE Alliance’s amendment authorizing creation of a contingency trust fund designed to protect customers’ cargo and the ocean transportation chain should one of THE Alliance’s carriers experience financial distress or an insolvency event.  Parties to THE Alliance Agreement are Hapag-Lloyd AG and Hapag-Lloyd USA LLC (acting as one party); Kawasaki Kisen Kaisha, Ltd.; Mitsui O.S.K. Lines, Ltd.; Nippon Yusen Kaisha; and Yang Ming Marine Transport Corp.  Each of these carriers would initially contribute $1 million into the contingency trust fund and a further $9 million in additional funds or through a letter of credit. According to the filing, the agreement establishes the voting rights and obligations for the Parties in the event of an “Insolvency Event or Material Adverse Change.”  In addition, the agreement establishes procedures for the orderly removal and/or replacement of vessels and the rights of the remaining Parties to negotiate directly with agents and subcontractors of the affected Party.  The contingency fund would be administered by a trustee.“I firmly believe that if a carrier joins an alliance, it is the responsibility of the alliance members to ensure the cargo gets to where it needs to go,” he says. “If a carrier fails and that carrier is party to an alliance, the cargo carried on the failed company’s ships may equate to a fraction of the container volume carried. Many containers may belong to the other carriers in the alliance.”