The Agriculture Ocean Transportation Coalition has circulated the following document on Carrier Collusion:

DATE: August 4, 2003
TO: AgOTC Members
FROM: Peter Friedmann
Tel: 202-783-3333 Fax: 202-783-4422 OurManInDC@aol.com
SUBJECT: Carrier Collusion
We now have an opportunity to do something about the continued ocean carrier collusion which has resulted recently in dramatic increases of rates, imposition of surcharges, inflexibility of the carriers in negotiations, manipulation of capacity, generally undermining the carrier-shipper relationship. Please take the time to read this message.
The Problem & Solution:
Only because the ocean carriers were granted a unique immunity from US antitrust laws back in 1916 are they allowed to share proprietary information, to jointly fix rates, and agree on all other terms of service. In other words, what the carriers are doing is perfectly legal under the Shipping Act, even though it greatly injures US export competitiveness, and increases cost for US consumers. The solution therefore is to change the law, to revoke the carriers’ antitrust immunity.
Fortunately, the Chairman of the Judiciary Committee with jurisdiction over US antitrust laws is Congressman Jim Sensenbrenner of Wisconsin, who agrees with us. He is prepared to introduce legislation to revoke carrier antitrust immunity.
Revoking antitrust immunity would mean that the carriers could no longer discuss pricing, no longer agree on surcharges, GRI, etc., cannot agree to reduce to capacity, cannot agree among themselves on the contract terms they will propose to their customers. Two years ago Chairman Sensenbrenner introduced such legislation, but, frankly, carrier opposition was vigorous and shipper support was tepid, largely, I believe, because rates were quite low. The environment has definitely changed.
Action Plan:
It is now up to us, as shippers, to show Congressman Sensenbrenner and the rest of Congress that the time has come to force ocean carriers to compete for shipper business, to treat shippers as their customers, and to quit jointly fixing rates and take other steps detrimental to US commerce. Chairman Sensenbrenner’s staff has specifically told us that they will move such legislation forward as soon as we can show that he has the votes to move it through his Judiciary Committee.
Specific Steps:
First, you will find attached a letter to Chairman Sensenbrenner. We are seeking 500 (or even more) companies and associations to add their names to the letter, to show the Judiciary Committee the widespread support for his effort to repeal the antitrust immunity would enjoy. Please reply if you will add your company/association name, and please pass this letter on and encourage others to sign on as well.
Second, there are 37 Members of that Committee; we need to deliver 19 votes in favor. Congressman Sensenbrenner and the former Chairman Henry Hyde are already strongly in favor, meaning we need to convince 18 other Members of the Committee that this legislation is important. We have compiled a list of all the Members of the House Judiciary Committee (attached). Please look at the list to determine if you have a presence as a constituent in any of their Districts. Then, we will want to generate as many letters as possible to those Congressmen, encouraging support for the legislation.
We have drafted a letter which you can use as is, or even better, can revise to reflect your company’s interests. It is important to describe your company, location, the products you export and the type of business and specific reasons why you would like carriers to have to compete for your business.
Politics:
There is no question that agriculture interests are going to have to take the lead on this. I do believe we will have active support from the Teamsters Union (who feel that their drivers are being disadvantaged by collective carrier agreements as to how much they will pay for trucking services), some other associations, who have frankly told me that they are looking for agriculture to take the lead. A significant challenge for us is to get the American Association of Port Authorities to at least take a neutral position. Previously, the ocean carriers which are the major tenants of the ports, operating the marine terminals, have claimed that without antitrust immunity, they will have difficulty surviving and continuing to operate and pay rent for the marine terminals. Thus, the ports have opposed efforts to revoke carrier antitrust immunity. The agriculture shippers need to educate port authorities.
So we have plenty of work ahead of us, as it is ambitious to revoke an almost 100 year old privilege that the carriers have enjoyed. But antitrust immunity has not worked. It has not protected the US flag ocean carriers, who have all disappeared. It has not provided stability in this provision of services, as carriers go in and out of business and rates fluctuate wildly. Antitrust immunity has failed to achieve its stated objectives. Now it only serves the interest of companies based overseas who control ships built overseas and manned with non-US labor. Meanwhile it hurts US interests, including US farmers, growers, and packers.
We look forward to working with you on this ambitious campaign.