SPECULATION GROWS OVER CONFERENCE MERGER

SPECULATION GROWS OVER CONFERENCE MERGER

Meetings next week in Kobe could result in a merger of two ocean carrier rate-setting groups in Japan.

The Trans-Pacific Freight Conference of Japan and the Japan/Atlantic & Gulf Freight Conference could be merged at the Kobe meeting Sept. 24, officials at major Japanese shipping companies say.Japan has long maintained its own conference eastbound to North America, even though the rest of the Asia trade is handled by the Asia North America Eastbound Rate Agreement - Anera - superconference.

That stance is part of a longstanding tradition in a range of Japanese industries to follow standards and practices unique to this island nation. However, this "otherness" is gradually coming under pressure as Japan moves to internationalize.

The consolidation of two conferences could lead to structural changes.

Some Japanese carriers are now advocating that a unified Japan conference should be merged into the Asia-wide conference Anera, possibly before the end of 1996. From there, some carriers say, Anera should in turn become a much looser organization that better reflects industry changes.

Isao Shintani, president of Kawasaki Kisen Kaisha, said in a recent interview that conferences must change their role given the growth of non- conference lines and the U.S. push to further deregulate the industry.

Mr. Shintani advocated a new conference structure that brings all carriers together - assuming conferences keep their anti-trust exemptions under U.S. shipping reform - and allows them to talk. In contrast with existing conferences, carriers would be under no overt pressure to follow a collective rate policy.

"Instead of a policeman, it would be a tourist guide," said another Japanese carrier official who supports the idea. "There would be no penalties, but some kind of guidelines."

Reportedly, Sea-Land Service may be one of the possible hitches to merging the two Japan conferences, however. Sea-Land officials were not immediately available for comment.

Sea-Land is a member of TPFC, but not of JAG. Sea-Land also maintains an all-water service from Asia to the U.S. East Coast through a space-sharing agreement with Maersk Line. The fear is that, faced with a take-it-or-leave-it option on Japan conference membership, Sea-Land may pull out all together.

The conference would then face significant problems having such a large member suddenly removed.

But other carriers said the problem was not insurmountable. Furthermore, the all-water service is a relatively small part of Sea-Land's total operations.