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

Last week, the United States Department of Transportation took further steps to address various issues identified in recent train accidents involving crude oil and ethanol shipped by rail. The announcement was made by DOT with other DOT agencies, including the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Logistics Management Group News Editor Jeff Berman had an opportunity to interview Derek Leathers, President and Chief Operating Officer of Werner Enterprises, at this month's NASSTRAC Shippers Conference and Transportation Expo in Orlando. They discussed various aspects of the truckload market, including prices, fuel, and regulations.

During this webcast our presenters will apply the findings of the 23rd Annual Trends & Issues in Transportation and Logistics Study to the world of shipper-carrier decision making. They'll examine the primary aspects that will influence the future direction for shipper-carrier decision-making.

For February, the month for which most recent data is available, the SCI dropped to -1.0 from January’s 2.6, with FTR explaining that the short term positive impact from one-time adjustments for rapidly dropping diesel prices and the suspension of the 2013 motor carriers hours-of-service expires later this year.

Seasonally-adjusted (SA) for-hire truck tonnage in March was up 1.1 percent on the heels of a revised 2.8 percent (from 3.1 percent) February decline, with the SA index at 133.5 (2000=100). This is off 0.3 percent from the all-time high for the SA of 135.8 from January 2015 and is up 5 percent annually.

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