Carrier immunity should set sail

Carrier immunity should set sail To be blunt, antitrust immunity anywhere in the world is no longer relevant in today's liner shipping industry.
This rare commercial privilege, which essentially allows carriers to collectively discuss pricing in the name of industry stability, has simply outlived any potential purpose, despite what some members of the ocean shipping industry may argue.
It's a stretch to believe that antitrust immunity helped carriers weather one of the worst economic recessions in modern history. Survival simply required the industry's top executives to individually make tough decisions on cost and capacity cuts to keep their companies afloat. In fact, no container carriers succumbed during this particularly harsh period.
So why bother keeping antitrust immunity for box transport pricing? The European Commission two years ago outlawed the practice in Europe, and the industry continues to move containerized freight in that trade today, even regaining some profitability.
Realizing this, Reps. James L. Oberstar, D-Minn., and Elijah Cummings, D-Md., in late September introduced a bill ( H.R. 6167, the Shipping Act of 2010) to eliminate antitrust immunity for ocean carrier agreements involving the U.S. trades. Their proposed law would prevent liner carriers from discussing or agreeing upon rates and charges, including guidelines that form the basis of pricing services for their customers, and enact a host of other changes (See story pages 46 ' 51).
Oberstar said 'eliminating the antitrust immunity for these conference agreements will increase competition by requiring ocean carriers to compete in the marketplace with the best price and service to get shippers' business. That will benefit industry as a whole.' Shippers agree.
Many liner carrier executives are quietly resolved to the very real possibility that antitrust immunity for the industry is nearing the end. Maersk Line Chief Executive Officer Eivind Kolding said in a press report at the time of the 2010 Shipping Act bill's introduction that 'it is reasonable to expect that antitrust immunity in the U.S. will go.'
Even Singapore, another liner carrier antitrust immunity holdout, is now under intense pressure from shippers to abolish the privilege. 'We believe the conference system will be consigned to history before this decade is out, as the collapse of the system in the U.S. will precipitate similar developments elsewhere,' said the Asian Shippers' Council in response to the Singaporean government's proposal to extend antitrust immunity for liner carriers until Dec. 31, 2015.
If and when liner carrier antitrust immunity is completely abolished, it should not be portrayed as a case of 'shippers win, carriers lose.' Rather it should be about proceeding in a better way to facilitate an important industrial activity in a non-regulated manner. In this regard, shippers should then pay a fair price for liner service that contributes to an efficient global supply chain.