Sunday, September 26, 2010

U.S. Anti-Trust for Ocean Carriers under review

Once again, there is talk of changing the U.S. law which allows ocean carriers to get together and talk about rates.

From The Journal of Commerce

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

Well, I say, just deregulate the whole thing, and get rid of the FMC.

First off, giving the FMC more authority, is really a waste of taxpayer money.
We already have lots of courts which deal every day in contract disputes. There is nothing so special about an ocean service contract, from any other type of contract which requires delivery of a good or service.

And, from the ocean carrier side, they would probably be better off not relying so much on what their competitors tell them. They need to learn to look at their business individually, and not rely on what was always industry practice. Or, worse yet, believing "well, if XYZ charges this rate, then if we charge that rate we will make money".

Too many carriers have no idea of their true cost doing business. This last downturn has forced them to look at each piece of business, and finally start making those tough changes.

For example, the policy of ocean carriers supplying chassis in the U.S. is going away. And why not? From what I understand, this practice was only in the U.S., that no where else in the world did the ocean carrier supply the chassis.

Maersk took the hard decision to quit providing chassis, and everyone else will follow. If this decision had been left to "collective agreement", it never would have happened.

So, I say, totally deregulate, and let the market forces play out. For those exporters complaining they can't get containers, or can't get space. Well, what does your service contract spell out?

Oh, you don't have a service contract?

Well, maybe that's the problem.

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