Not a victimless offense

I have read Peter Tirschwell's column in the March 31-April 6 Journal of Commerce (A $4 million question) regarding the Sea-Land equipment-substitution case. I have also read the many recent articles that have been written about the proceedings. In fact, I have read the judge's decisions in the case in which liability and then the penalty was recommended. I am not unfamiliar with the facts.

I have been involved in federal regulation for almost 30 years. I have watched the flow of regulation go from the overly restrictive Interstate Commerce Commission to the current "anything goes" environment. I am disappointed that the article totally omitted the point and real purpose of the statutes alleged to have been violated.

The issue of tariff filing is clearly a waste of time in the current environment - no one reads them anyway. Service contracts now dominate the pricing of carrier services.

However, what happened in the Sea-Land case represents a situation that should not be overlooked or swept under the rug. Tariff filing was intended to minimize price discrimination. Discrimination can flourish only if it is kept secret. The 1998 Ocean Shipping Reform Act permits confidential contracts but not totally secret arrangements.

The question is therefore necessary: Why has such a case been prosecuted? What no one wants to acknowledge is that price discrimination, if left unchecked, eventually destroys the competitive market. Sea-Land's actions gave a competitive advantage to certain companies, and harmed those that were not preferred. These disadvantaged persons had to compete with those favored and advantaged by Sea-Land's actions. The disadvantaged companies represent real people, their work, their livelihoods, and the long-term health of the marketplace.

Contrary to what is implied in your article, violation of the tariff-filing regulations - violations clearly intended as a means of engaging in discrimination - is not a victimless offense. How many disadvantaged companies were put out of business because of these violations? Has anyone thought to ask that question? Obviously not.

The importance placed upon this type of activity is amply reflected in the parallel domestic statutes. The very same kind of activity that is the subject of the Sea-Land case is a criminal offense.

How can anyone take the position that such activities are as trivial as implied in your article and those similar articles that have recently been published in The Journal of Commerce?

The facts behind the case represent something much more serious than failing to file a piece of paper with a federal agency. Those in the transportation community who have seen the effects of such discrimination on a first-hand basis find the implications of "no harm done" to be a greater offense that the violations involved.

Rick Rude


Falls Church, Va.