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 ·

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

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 [email protected]

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!

Article Topics

Container · Shipping · Transportation · All Topics
Latest Whitepaper
Making the Case for an Integrated Fleet Management Solution
Fleet management technology can drive positive supply chain and business results. Explore this special edition of Making the Case where we lay out the benefits of integrated fleet management technology in your organization.
Download Today!
From the October 2017 Logistics Management Magazine Issue
A leading distributor of professional salon products in the U.S. forms unique partnerships with its key LTLs to lower transport costs, reduce its carbon footprint and improve service to its 565 store locations.
Q4 2017 Rail/Intermodal Roundtable: Improvements apparent; work remains
LM Viewpoint: Collaboration, Now more than ever
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
The State of the Rail/Intermodal Markets
In this webinar our panel will discuss the new service challenges facing rail/intermodal providers and offer practical advice for how shippers can keep efficiency high and costs down.
Register Today!
EDITORS' PICKS
SalonCentric: One Beautiful Network
A leading distributor of professional salon products in the U.S. forms unique partnerships with its...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...