CONTAINER | End is nigh for antitrust law

Originally published in Lloyd’s List, 2010/09/30

NO-ONE likes to give away a prized possession voluntarily. That is why container shipping is already putting up resistance to moves in the US to end their antitrust immunity. This gives them rare privileges, with ocean carriers able to get together without breaking the law to discuss and regulate freight rates and capacity.

But already, the conference that formerly covered the US-Europe trades has closed down, following legal changes in Europe. Brussels removed lines’ block exemption from competition law in the European trades two years ago, by which time the Trans-Atlantic Conference Agreement had shut.

So that basically leaves the Transpacific Stabilization Agreement and Westbound Transpacific Stabilization Agreement, neither of which are old-fashioned conferences, but research and discussion groups for major container shipping lines operating on those respective trades.

Despite complaining bitterly about the steep rise in freight rates in the Asia-Europe trades where conferences no longer exist, shippers are still pressing for Washington to follow Brussels and remove the industry’s antitrust immunity.

The discussion agreements do not set freight rates, but member lines do agree between themselves the size of increases they would all be seeking. They also provide a forum for competing lines to meet and talk about other matters of mutual interest.

At the TSA’s last meeting in Seattle, FMC officials attended and took note of everything that was said, so it seems unlikely that any issues that shippers would regard as potentially contentious would have been discussed.

Even so, cargo interests want ocean shipping’s special treatment to end so that normal market forces prevail.

Surprising as it may seem given the history between the two sides, some top liner shipping bosses may agree. As Maersk Line chief executive Eivind Kolding observed this week, the issue of antitrust immunity can be so harmful to customer relationships that perhaps it would be best to dispense with it rather than fight to keep a concession that may not deliver that many benefits.

After all, there is plenty of anecdotal evidence to suggest that the absence of conferences helped speed up recovery in the Asia-Europe trades too.

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