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 - LM Editorial

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 Modern Materials Handling magazine

Subscribe today. It's FREE!
Find out what the world's most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Recent Entries

Parent company's Logistics & Automation Division began servicing North American customers in 1962, 12 years before Murata machinery was established.

Pack Expo and Pharma Expo to draw 2,400 exhibitors in more than 1.2 million net square feet of exhibit space.

Cloud-based manufacturing execution systems grant visibility into centralized or global manufacturing environments.

In-plant trailers represent a tried and true method of moving materials through plants safely and efficiently. While trailers look alike at first glance, there are some significant differences that greatly affect performance and cost. The wise purchaser will study the differences and select the system that makes the best sense for the specific application. This complimentary white paper addresses the most important design factors to consider when specifying in-plant trailers.

Very often companies debate needing a new WMS or just muddling through while constantly adding to the List. The List is that set of notes that operations people wish their WMS could do. Every operation has their unique items, things their business requires that their WMS system doesn't do, or does poorly. This white paper reviews how to extend a WMS to allow the List to become a thing of the past.

Article Topics

News · Container · Transportation · Shipping · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

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