Rep. James L. Oberstar, D-Minn., formally launched a battle between shippers and ocean carriers over carrier antitrust immunity, introducing this week legislation that would abolish ocean carriers’ ability to meet and discuss rate guidelines.
The Shipping Act of 2010 would ban ocean carrier discussion agreements while preserving carriers’ ability to form agreements aimed at improving service, such as vessel sharing agreements. The bill also would give the Federal Maritime Commission more authority to mediate and resolve service contract disputes.
The bill has been the subject of heated discussion in Washington since a draft copy started circulating in August. Last week more than 30 shipper groups sent a letter to Oberstar, chairman of the House Transportation and Infrastructure Committee, supporting his position on antitrust immunity.
“Even under the current regulatory scheme, immunity for [rate discussion] agreements has long outlived its usefulness,” Oberstar said in remarks that accompanied the bill. “Eliminating the antitrust immunity … will increase competition by requiring ocean carriers to compete in the marketplace with the best price and service to get shippers’ business. That will benefit the industry as a whole.”
In June Oberstar told a National Industrial Transportation League forum that he would file a bill to eliminate antitrust immunity. Carriers’ ability to meet and discuss rates and accessory charges has been the object of scrutiny since the beginning of the year, when exporters claimed that carriers were causing artificial capacity shortages and pushing up spot rates to recoup their record losses in 2009.
Carriers responded that they were adjusting capacity to meet market conditions. On Thursday the World Shipping Council said “the market has corrected itself, and today there is ample capacity and service. Capacity shortages in late 2009 and early 2010 were brief, market-driven and unforeseen by shippers and carriers.”
The WSC also said that while the Oberstar bill would “vastly increase, rather than decrease, government intrusion into the details of business-to-business commercial conduct ... There are numerous problems with these provisions which we will identify in more detail for the Committee after further review.”
With few days left on the congressional calendar, the carrier trade group said Oberstar’s bill was the first step in a regulatory review process that will stretch into the next Congress.
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