SHIP REFORM BILL WOULD
ABANDON SMALL SHIPPERSI agree wholeheartedly with Ed Emmett's suggestion that we not be ''swayed by the same old arguments'' on ocean shipping reform. But it is Mr. Emmett who makes ''the same old arguments,'' which are no more valid today than they were in the past (''The anti-reformers' tired arguments,'' Aug. 1, Page 9A).
At the heart of Mr. Emmett's argument to eliminate transparency and do away with prohibitions against unreasonable discrimination in shipping is the idea that confidentiality is the norm in business relationships. But he conveniently ignores a significant point: Antitrust laws normally govern business relationships, but not in ocean shipping.
Ocean shipping is unique in that the carriers regularly get together to discuss and jointly set rates. Imagine sellers of steel or milk or automobiles getting together in the same way and then entering into ''confidential'' service contracts with their customers. In effect, this is what the Ocean Shipping Reform Act would bring about.
Large shippers are understandably unconcerned about the consequences of such a system. But the antitrust laws were not enacted to protect the big companies of this world. They were enacted to protect the small and the disadvantaged.
In ocean shipping, transparency and prohibitions against unreasonable discrimination serve this function. Suggesting that eliminating these safeguards would enhance business opportunities is no different from suggesting that repealing antitrust laws would enhance business opportunities. Undoubtedly this is true for some, but at whose expense? Rest assured it would not be at the expense of large shippers.
Contrary to Mr. Emmett's assertion, opposition to the Ocean Shipping Reform Act is widespread, with an increasing number of ports along with shippers' associations representing small and medium-sized shippers and maritime labor questioning the need for changing the current system along the lines envisioned in the bill.
For over a decade, that system functioned very well - contrary to the arguments of the large shippers. Even the carriers that now support this bill vigorously defended the current system until they were threatened with repeal of antitrust immunity by the large shippers. The carriers do not defend the Ocean Shipping Reform Act on its merits, but support it because their customers (read large shippers) want it.
The ocean shipping industry today is not plagued by prohibitively high rates, as the large shippers would have you believe. The past two years, however, have seen unprecedented turmoil. Rates have dropped by one-third, a boon to shippers in the short run, but a threat in the long run as the carriers respond with an unprecedented wave of consolidation through mergers and operating alliances.
We are now at a point where the impetus behind enactment of the Ocean Shipping Reform Act is the process itself. The Senate Commerce Committee has tried to reach a consensus on shipping reform, but it is clear that this is impossible.
It is time to step back, take a fresh look at the current environment for ocean shipping and decide whether the proposed bill is in the public interest.
Martin J. Lewin
Aitken Irvin Lewin Berlin
Vrooman & Cohn LLP