Subscribe to our free, weekly email newsletter!


FMC may rule on “talking agreements” soon

High on the agenda for the December 8 session is the FMC’s investigation of Transpacific Stabilization Agreement and the Westbound Transpacific Stabilization Agreement
By Patrick Burnson, Executive Editor
December 06, 2010

The future of two of the few remaining ocean carrier cartels may be determined when the Federal Maritime Commission meets this week.

High on the agenda for the December 8 session is the FMC’s investigation of Transpacific Stabilization Agreement (TSA) and the Westbound Transpacific Stabilization Agreement (WTSA). This pair of so-called “talking agreements” are in the eyes of many shippers, vestiges of a bygone era when ocean shipping was virtually unregulated.

“Shippers expressed the opinion that the ocean carriers continued to withhold vessel capacity from the market in a collective effort to raise prices by leveraging access to scarce capacity and equipment, said FMC commissioner Rebecca F. Dye last month. Speaking at the Northeast Cargo Symposium, she also noted that shippers reported that their service contracts did not protect them from numerous rate and surcharge increases.

“Their service contracts also did not provide the volume forecasting specificity necessary to assure them of vessel space and equipment,” said Dye.

Shortly before stepping down as chairman of the National Industrial Transportation League’s ocean committee, Michael Berzon told LM that Carriers can raise rates in lockstep now, without any concern that such behavior represents a violation of anti-trust laws.”

That may be in question, however, once the FMC concludes its hearing.

Last June, the FMC adopted the recommendations of Dye’s interim report, and took action in several areas to provide positive changes in U.S. ocean transportation. The Commission also voted to increase oversight of the TSA and WTSA by requiring verbatim transcripts of certain Agreement meetings.

For its part, TSA Executive Administrator Brian Conrad said carriers have experienced steadily rising costs in the areas of labor, container-handling, inland transportation and equipment purchasing and leasing.

Conrad also noted that vessel capacity in the trans-Pacific increased 18.6 percent, with 15 new and restored services, including three new operators on the Pacific.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Mexico's growing importance in the continental supply chain is now being recognized by North American transportation groups

Satish Jindel, president of Pittsburgh-based SJ Consulting, says that one way for LTL carriers to improve both their bottom lines and overall productivity is to get a better grasp on the cost of handling a shipment and the pricing they have for it.

Falling 5.5 cents to $2.668 per gallon, this follows last week’s 5.9 cent decline for the lowest weekly average price going back to the week of October 14, 2009, when it was at $2.60 per gallon.

With the latest round of Trans-Pacific Partnership (TPP) negotiations in Maui, Hawaii ending without a deal, U.S. supply managers may be adjusting to other global sourcing strategies.

The PMI, the ISM’s index to measure growth fell 0.8 percent to 52.7 (a PMI of 50 or greater represents growth). PMI growth has been at 50 or higher for 31 straight months (with the overall economy growing for 74 months), and the current PMI is 1.7 percent below the 12-month average of 54.4.

Article Topics

News · Container · Transportation · Shipping · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA