Nick Savvides updates us on the Ocean Shipping Antitrust Enforcement Act (OCAEA), which has been sponsored in the US Congress. The bill would repeal the current anti-trust exemption for ocean carriers, and would prevent US lines from entering into vessel-sharing agreements (VSAs).
Not everyone thinks this is a good idea, though ocean freight forwarders do think it would be a good idea.
One commentator pointed out that VSAs would be possible without anti-trust protection. Airlines have been code-sharing flights for years, and they have not been granted anti-trust exemptions.
Other commentators believe that ocean carriers’ increased vertical integration, through mergers and purchases of smaller firms, is more of a problem. If ocean shippers could control end-to-end delivery contracting, that would be a definite reduction in competition. And brokers would be threatened.
A more serious problem in my view is the poor carrier on-time performance, endemic in ocean shipping. Ocean carriers have been pulling capacity and rearranging it to keep ultra-large vessels operating nearly full, but the result has been a completely unpredictable delivery schedule for the beneficial cargo owner’s goods. And that is a serious supply chain problem for every customer.
It will be interesting, as rates slide, how ocean carriers handle the reliability problem; can they find ways to take care of their customers? Otherwise, we may see more private fleets and dedicated lines with guaranteed service, probably using smaller, less efficient ships.
By Nick Savvides 28/03/2023Shippers and liners oppose plan to prevent US ocean carrier VSAs – The Loadstar