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Andrew M. Danas

Abstract

The United States liner industry, both in its competitive rate struc- ture and in the competitiveness of United States based flag companies, has been declining for at least the past decade. This decline has prompted policymakers to propose that the United States liner confer- ence system be deregulated. Generally, two themes underlie these pro- posals: an elimination or weakening and streamlining of the regulatory powers of the Federal Maritime Commission (the United States is one of the few nations with a regulatory agency exclusively devoted to regulat- ing the conference system), and a strengthening of the conferences' anti- trust immunity. Because such legislation is antithetical to traditional concepts of United States domestic competition policy, previous Con- gresses failed to enact reform legislation. On March 20, 1984, however, President Reagan signed the Shipping Act of 1984, which comprehen- sively restructured the United States maritime laws. While this Act culminates seven years of attempted maritime reform by the Congress, it is compromise legislation, merely a step toward a more fundamental re- thinking of United States maritime policy. The Act authorizes the crea- tion of a Presidential Advisory Commission at the end of this decade that will ascertain the need to further strengthen the conference system and reform the United States regulatory policy. This article addresses one of the concerns of opponents to such re- form measures: the protection of shippers' interests through the creation of shippers' councils. These councils, which would enjoy an antitrust exemption that would permit them to either consult or negotiate general service and rate issues with conferences, exist in a number of other na- tions. United States proponents of these councils generally perceive them as a countervailing power to strong conferences, supplanting, to a certain degree, the role of the antitrust laws in protecting the interests of shippers and ensuring economic efficiency in the conference system. Af- ter a survey of current industry conditions, this author concludes that 1) the proposals previously considered by the Congress are inadequate for the creation of these councils; 2) based upon prior experience under similar legislation, these councils would probably not form even if given antitrust immunity; and 3) reliance on the creation of export trading companies under the Export Trading Company Act of 1982, combined with the shippers' associations provisions of the Shipping Act of 1984,

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