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

Spot market freight volumes for the month of August remained elevated compared to seasonal norms, according to data issued this week Portland, Oregon-based freight marketplace platform and information provider DAT.

Factors such as rising freight rates, shrinking capacity, an increased desire for global supply chain visibility, have all worked together to drive the need for instituting a culture of continuous improvement in logistics operations and transportation management systems (TMS). To meet today's complex logistics challenges, managers are stepping into a more streamlined, automated approach to transportation management in order to function at optimal levels both domestically and internationally. Read the latest special report.

The Atlanta-based company said that it plans to hire between 90,000-to-95,000 seasonal employees, up from about 85,000 last year, to support “the anticipated holiday surge” for package deliveries commencing in October and running through January.

The Memphis-based company reported today that quarterly net income of $606 million was up 24 percent annually, and revenue, at $11.7 billion, was up 6 percent. Operating income at $987 million was up 24 percent.

The World Shipping Council (WSC) released an update to its survey and estimate of containers lost at sea.

Article Topics

News · Container · Transportation · Shipping · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA