BALTIMORE -- The chairman of the House Coast Guard and Transportation subcommittee said Congress will be watching closely to see whether the European Union's abolition of rate-setting conferences creates a need for changes in United States shipping regulation.
"Some have claimed that the U.S. and EU systems can co-exist side-by-side without affecting either side, but I am curious to see if that is really possible," Rep. Elijah Cummings, D-Md., said at a seminar on the future of the Federal Maritime Commission hosted by the Containerization and Intermodal Institute.
"In particular, if, as the EU anticipates, elimination of the antitrust immunity for ocean common carriers introduces more competition that lowers rates, wouldn't the carriers potentially seek a market in which to make up lost profits, and wouldn't they likely seek them in a market that still extends antitrust immunity?" Cummings asked.
The EU changes take effect Oct. 17.
Shipping law in the U.S. provides antitrust immunity for ocean carriers, but the confidential shipper-carrier contracts permitted by the Ocean Shipping Reform Act of 1998 have led most carriers in U.S. trades to abandon conferences in favor of discussion agreements that allow ship lines to agree on voluntary rate guidelines.
Some shippers and non-vessel-operating common carriers accuse carriers of using discussion agreements to illegally collude on rates. At a June 19 hearing before Cummings' subcommittee, they called for an end to carrier antitrust immunity,
The June hearing was a follow-up to a hearing April 15 in which Cummings and other lawmakers sharply criticized the commission for what they said was lax administration, lack of direction and poor morale among commission staff.
Cummings said Thursday he was pleased with the commission's initial response to the criticism, and that he is eager to receive a 90-day status report due in mid-September.