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ESC welcomes proposals to eliminate anti-trust immunity for carriers in the US

: Monday, 27 September 2010

The European Shippers' Council has welcomed the "Shipping Act of 2010" introduced by Congressman Jim Oberstar that proposes to eliminate antitrust immunity for ocean carrier agreements in the US. The proposed legislation will prevent carriers from discussing, fixing and/or regulating freight rates and surcharges through conferences and/or discussion groups.

Nicolette van der Jagt, Secretary General of ESC said: "the Oberstar Bill is a very positive step forward. If enacted, it would end limited anti-trust immunity that has been in place in the U.S. for nearly 100 years." "We are confident that the bill will receive a lot of support in the US but also from shippers' groups, in Europe and in particular in Asia, the latter being the last bastion of liner cartel activity. More and more people see that anti-competitive collaboration is not the way to address industry's problems. Competitive collaboration is required: working closer with customers is the way to tackle the pressures of rising costs and to protect one's investment."

If adopted, the Act would bring the legislation in the US largely in line with regulation in Europe where there is a prohibition to discuss and agree rates following the repeal of the block exemption Regulation 4056/86. Carriers in the US would be allowed to continue to operate vessel sharing agreements, although such authority has limitations to ensure adequate competition in particular trades. Interestingly, Oberstar referred to the EU's consortia block exemption threshold of 30% market share as "a good place to start" in his proposed bill.

Ms van der Jagt added that the action was particularly warranted in light of container carrier practices including abrupt enactment of surcharges, rolling scheduled cargo from vessels, and refusing to carry containers on ships from other carriers. "It was also refreshing to see that Mr Oberstar specifically referred to the repeal in Europe and remarked that since the elimination of the antitrust immunity here, he was not aware of any ocean carriers being put out of business because of the loss of that exemption."

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