WASHINGTON — A coalition of importer, exporter and logistics associations is asking Congress to help change the law governing antitrust immunity for international ocean carriers, arguing that shipping rates should be set by market forces and not foreign-based companies “acting in concert.” The coalition, which includes the American Apparel & Footwear Association, National Retail Federation, American Cotton Exporters Association and American Cotton Shippers Association, sent a letter to House Transportation & Infrastructure Committee chairman James Oberstar (D., Minn.) on Tuesday pressing him to move forward on legislation to impose new restraints on ocean carriers.
Under current law, ocean carriers may meet to discuss shipping rates and other freight charges, as well as terms of service.
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Retailers, importers and exporters argue that carriers, particularly in the U.S. westbound and eastbound Pacific trade routes, charge identical or similar rates, break contracts to enact surcharges, bump containers off ships and refuse to load cargo without additional compensation.
“It’s being done with impunity,” Nate Herman, vice president for international trade at the AAFA, said in an interview. “What is happening today is not only that they are imposing surcharges, but they are imposing them in violation of confidential service contracts with shippers. Basically your only recourse is to take them to court, which means containers will be bumped off ships and you won’t make it to market because you are sitting in court.”
The coalition is calling on Congress to “end the legalized cartels” they charge are “specifically allowed to engage in price fixing, cargo allocation among the carriers, and even, agreements to restrict capacity.”
“The marketplace should be allowed to determine the prices at which freight moves,” the groups said in the letter. “Each carrier, individually, should make its own decisions as to pricing, service and capacity, without the knowledge of their competitors’ plans or the agreement of their competitors.” Oberstar’s committee’s press secretary declined to comment, but in June the congressman called for broad reform of ocean carrier practices, as well as new restrictions to protect shippers.