Body blow dealt to cartels as FTA heralds US anti-trust shipping Bill

Friday 24 September 2010

The Freight Transport Association (FTA) has heralded the introduction of European-style, anti-trust legislation designed to eliminate cartel activity, including price-fixing, liner conferences and discussion agreements in US liner shipping markets.

The Bill, which was tabled by Congressmen Oberstar and Cummings last night (23 September), marks a significant step in a process that the US National Industrial Transportation League (NITL) and FTA initiated in 1992.

Chris Welsh, FTA’s General Manager of Global and European Affairs, said:

“Make no mistake, these legislative steps represent an historic landmark in the abolition of the sorts of unacceptable cartel activity that have plagued shippers around the world and caused such disruption to the global supply chain.”

There is no doubt that cartels have been behind the cynical rate increases, unfair or deceptive surcharges, capacity shortages and other unacceptable shipping practices that have come to characterise the liner shipping industry in the past year. And this comes at a time when trading conditions are already tough enough.

The NITL has been a prime mover behind Congressman Oberstar's new Ocean Shipping Reform Bill following unprecedented complaints from US shippers over "roll overs", the tearing up of service contracts and capacity withdrawals by carriers in the Trans-Pacific trades.

Welsh concluded:

“Reforming international ocean shipping was never going to be a quick win, but it is immensely satisfying to see the seeds we planted nearly twenty years ago bearing such fruit.

“Our attention is now firmly fixed on seeing the safe passage of the Ocean Reform Bill through Congress, and imposing the same sorts of legislation in fast emerging economies such as those found in Asia.”


Notes for editors

The much anticipated bill to review antitrust immunity for ocean carriers was tabled last night by Congressmen Oberstar and Cummings. This marks a key milestone in joint collaboration between the US National Industrial Transportation League (NITL) and FTA which begun in 1992. FTA and NITL joined forces to oppose the then Trans-Atlantic shipping cartels (TAA and TACA agreements) from carving up the market and forcing up rates by over 100 per cent. The results of this collaboration led to the introduction of the US Ocean Shipping Reform Act in 1996 which introduced confidential service contracts and steps that ultimately led to the abolition of liner conferences by the European Commission in 2008.

The legislative steps announced by Oberstar and Cummings would largely bring the US into line with the EU repeal of liner conferences and carriers agreements, including consortia.


FTA Press Office

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