The current Shipping Act allows liner carriers to collaborate on rates and surcharges as long as their agreements are filed with the Federal Maritime Commission (FMC). The new bill proposes to end this.
In response to the HR 6167 Shipping Act introduced to by House Transportation and Infrastructure committee chairman, Democratic Congressman James Oberstar, the WSC said: "Although recent service disruptions had purely economic causes, we nevertheless recognise some shipper trade associations have expressed support for legislation to amend the Shipping Act and to change the US regulatory system for liner shipping, and in particular to repeal ocean carriers' rate discussion authority.
"We urge Congress to consider fully the effects of eliminating this authority," said the WSC.
"It is the carriers' expectation that repeal of rate discussion authority would lead to greater rate volatility and less predictable and less stable markets.
"Greater rate instability is unlikely to be in the interests of shippers or in the interests of carriers that must continue to make billions of dollars of investment in the capacity needed to serve American commerce efficiently.
"What should not be lost in a review of the Shipping Act is the fact that ocean carriers have invested many billions of dollars over the years to meet container trade growth that was three to four times GDP growth over the past 20 years.
"Investments of this scale and duration need some measure of assurance and predictability. If the investments are not made in advance of when the capacity is actually needed, cargo transportation will suffer."
The WSC's 29 shipping line members represent 90 per cent of the global liner vessel capacity and carry 130 million TEU a year, the report added.
Source : HKSG, 01.10.10
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