In what may well become an annual event, Republican legislators have filed a bill in the House of Representatives that would repeal ocean carriers' antitrust immunity. The sponsor of the bill is Rep. F. James Sensenbrenner (R-Wis.), chairman of the house Judiciary Committee. Co-sponsors are Rep. Henry J. Hyde (R-Ill.) and Rep. Asa Hutchinson (R-Ark.).

The Free Market Antitrust Immunity Reform (FAIR) Act of 2001 (H.R. 1253) is identical to legislation that Hyde filed last year. Although labor unions and some business groups supported the proposal, that bill never made it out of committee.

The bill would amend the Shipping Act of 1984 to remove antitrust immunity for ocean carrier conferences and discussion agreements as well as for marine terminal operators that engage in cooperative rate and service arrangements. The proposal also would remove protections for foreign inland services that are offered under "through transportation" arrangements and for providers of dock, warehouse, and terminal services outside of the United States that relate to U.S. import and export transactions. Vessel-sharing, slot-charter, and similar agreements that only affect vessel operations should not be affected.

In a speech introducing the bill in the House, Sensenbrenner said foreign ownership of most major U.S.-flag shipping lines had prompted him to file the legislation. "What justification could possibly exist for a law that allows foreign ship owners to fix prices at the expense of American consumers?" he asked. "Clearly it's time to repeal this outdated exemption."

Washington trade attorney Peter Friedmann, counsel for the Coalition of New England Companies for Trade, believes H.R. 1253 could get further in the approval process than its predecessor did. In a speech at the group's annual Northeast Trade Conference, Friedmann predicted that the bill would not be enacted this year but that "it could make its way through Congress next year." One reason it may be more successful, he said, was growing sentiment in Congress that antitrust immunity was no longer needed to protect U.S.-flag carriers now that most have foreign owners.

Peter Gatti, vice president for international relations of the National Industrial Transportation League, agrees that Congress is unlikely to act right away. "I think prospects for this legislation to move in the short term are pretty slim," he says. For the bill to move ahead, proponents would have to show that the limited antitrust immunity that ocean carriers enjoy is causing real harm to shippers, he adds. That may prove difficult because the more competitive, free-market environment unleashed by the Ocean Shipping Reform Act (OSRA) is expected to eliminate incentives for carriers to coordinate pricing and services—and thus will obviate the need to legislate further change, he explains. Nevertheless, he adds, there are groups out there that are still concerned about antitrust immunity that will support the Sensenbrenner bill.

Gatti also suggested that any move to eliminate antitrust exemptions by the Organization for Economic Cooperation and Development (OECD), a group of 30 countries that discusses economic policies, could give the U.S. legislation greater impetus. The OECD is currently investigating the effects of antitrust immunity in the maritime industry on shippers and national economies.

At press time, the bill had been referred to the House Judiciary Committee and the Transportation and Infrastructure Committee's Subcommittee on Coast Guard and Maritime Transportation.