Newsletters

Last week, U.S. Representative Jim Costa (Democrat, California) reintroduced the bipartisan Ocean Shipping Antitrust Enforcement Act, which would repeal the exemption for foreign ocean carriers from all federal antitrust laws and address unfair practices from shipping lines, harming American businesses, producers, and consumers.

Following the enactment of the Ocean Shipping Reform Act (OSRA) in June 2022, and President Biden’s State of the Union’s speech cracking down on unfair competition, the bill would remove the provisions of the Shipping Act exempting shipping lines from antitrust laws and allowing them to perform vessel-sharing agreements. The co-sponsors of the bill, coming from both sides of the House of Representatives, note that Congress must redress the foreign-flagged ocean carriers’ longstanding exemption from all federal antitrust laws, that no other transportation sector enjoys. They consider that the bill would untie the hands of federal regulators (US Department of Justice, Federal Trade Commission, Federal Maritime Commission) to defend American exporters, shippers and consumers from shipping lines’ unfair practices such as collusion, unjustified container rate increase, exorbitant D&D fees and unexplained shipping schedules.

Among other provisions, the bill would authorise the FMC to formally comment on mergers and acquisitions under review by the DOJ’s Antitrust Division, citing the example of the Federal Aviation Administration which enjoy a similar comment authority for antitrust reviews. This bill currently awaits action by the House Judiciary Committee.

Commenting on the act to the Loadstar, Nicolette van der Jagt, Director General at CLECAT said, that forwarders wanted to see an end to anti-trust immunity. ‘Other modes of transport do not have anti-trust immunity… so why do carriers need it?’ asked Ms van der Jagt. ‘It can’t just be for vessel-sharing agreements, because they can have that without anti-trust immunity.’ She added that vertical integration by the shipping lines is more important than the VSA’s, including the acquisition of operators up and down the supply chain, which should be subjected to much closer scrutiny by the antitrust regulators.’

Source: Rep. Jim Costa’s website