WSC: Proposed law would destabilize industry

WSC: Proposed law would destabilize industry    The World Shipping Council said Thursday that H.R. 6167, the proposed Shipping Act of 2010, would “make the vessel sharing agreements that underlie most services to and from the United States today virtually impossible to continue to operate.”
   The council also said the law would create for the Federal Maritime Commission “a far more intrusive regulatory role with respect to what are today market-based commercial business-to-business relationships between shippers and carriers.
   “The cumulative effect of enacting H.R. 6167 would be to destabilize the industry at a time when the U.S. economy requires the continued investment in liner shipping assets, supported by a predictable and efficient regulatory regime,” it added.
   The WSC's response came in a statement accompanying a 16-page analysis of the bill, which was introduced last month by Reps. James L. Oberstar, D-Minn, and Elijah Cummings D-Md.
   While Oberstar said when he introduced the bill that it would “preserve some antitrust immunity for ocean carriers so that they can enter into vessel sharing agreements,” the WSC said, “it is simply incorrect to state that the bill would continue to allow them to operate as they do today under the Shipping Act, or that the bill's proposed changes resemble the approach taken by the European Union toward such agreements.”
   The law would be “wholly out of alignment with every other nation's treatment of such agreements. Impairing carrier operating agreements is not an agenda that has been advocated by shippers, nor is it supported by any findings or recommendations from the FMC.”
   The WSC said elimination of agreements where ocean carriers can discuss rates would lead to “greater rates volatility and less predictable and less stable markets.”
   It said large swings in freight rates, down in 2009 and up in the first half of 2010 were not the result of nor related to the U.S. regulatory system for shipping.
   WSC said it is willing to work with Congress if it wants to undertake a review of the Shipping Act and consider whether and how to design a different regulatory system for U.S. international liner shipping.
   While some shipper organizations have expressed some concerns about aspects of the bill, many are supporting Oberstar’s efforts to eliminate antitrust immunity for carriers. ' Chris Dupin