Shipping, rail regulation loom

Shipping, rail regulation loom    As Congress returns from its summer vacation, two major initiatives to overhaul regulation of the ocean liner and railroad industry are being thrust into the spotlight this week.
   On Tuesday, a coalition of 32 groups representing importers, exporters, and third-party logistics companies sent a letter to Rep. James L. Oberstar, D-Minn., calling for an end to what they said was the “antiquated and inappropriate exemption from our antitrust laws” that the liner shipping industry enjoys.
   “This extraordinary privilege may have made sense some 100 years ago, but in today's fully integrated global marketplace, competition rather than joint carrier discussions should be the determining factor which governs the price for moving freight,” the coalition said.

Oberstar

   The group, which includes giant trade organizations such as the National Industrial Transportation League, National Retail Federation, and National Customs Brokers and Freight Forwarders Association, told Oberstar it pledged its “cooperation and support for achieving the objectives you outlined.” The group was referring to comments the congressman made at conference in June organized by the NIT League, that new shipping rules are needed 'if we're going to compete effectively in the international market.'
   Meanwhile, regulation of the railroad industry will be spotlighted Wednesday, as the Senate Committee on Commerce, Science and Transportation holds a hearing on the federal role in national rail policy.

Porcari

   John D. Porcari, deputy secretary for the U.S. Department of Transportation, and Daniel R. Elliott III, chairman of the Surface Transportation Board, are scheduled to testify.
   Last December, the Senate Committee passed a bill that would enact sweeping reregulation of the railroad industry, aimed at benefiting shippers and increasing competition. Some senators, including Herb Kohl, D-Wis., have said they would also seek to repeal antitrust exemptions in the railroad industry.

Elliott

   In their letter to Oberstar, the shippers and intermediaries said, “enactment of the Ocean Shipping Reform Act of 1998 created a more competitive international liner market through the introduction of confidential service contracts. Congress must now take steps to insure that an environment exists so that contracts are honored and that ocean exports and imports can move at rates that are determined solely by competitive market conditions rather than by foreign-based companies acting in concert, even when that concerted action is permitted today.
   “While we agree that carriers should continue to be permitted to engage in cooperative agreements that result in more efficient services for their customers (which U.S. antitrust law certainly allows), Congress must end the legalized cartels which, under the current OSRA, are specifically allowed to engage in price fixing, cargo allocation among the carriers, and even agreements to restrict capacity,” the letter said.
   “The marketplace should be allowed to determine the prices at which freight moves. Each carrier, individually, should make its own decisions as to pricing, service and capacity, without knowledge of their competitors' plans, or the agreement of their competitors.”
   They noted that a Federal Maritime Commission investigation into carrier practices on vessel and equipment capacity and related matters shippers “noted that liner carriers in the U.S. westbound and eastbound Pacific trades have charged identical and/or very similar rates and terms for carriage and uniformly applied surcharges. Carriers have 'rolled cargo,' and refused to load cargoes without additional compensation. In doing so, carriers often ignore contractual service commitments and prohibitions on the unilateral imposition of surcharges. Shipper protests have been largely ignored by carriers, and these disputes are mooted by the need to move the cargo.” ' Chris Dupin