Ocean Shipping Deregulated

Ocean shipping – the last of the great governmentally controlled modes of transportation –took a mighty hit from the deregulation ax.

On May 1, the Ocean Shipping Reform Act of 1998 officially deregulated that mode by opening up a new world of individual contracts negotiated in secret. While the reforms will change the way steamship lines and their customers do business, it's likely to be a nonevent from inside the cab of a truck. However, it could affect "roadability" some time down the road as companies improve their equipment to become more competitive.

Draymen will continue to pick freight up from this place and bring it on over to someplace else and that's not going to change, said Tom Malloy, executive director of American Trucking Associations' Intermodal Conference.

"The effects will be pretty limited on the intermodal trucker," said Malloy. "Right now, I'm saying steady as she goes. It's not as traumatic as someone changing a port of call. There are no major shifts in where equipment flows to and from ports."

Signed into law in October, the reforms deregulate the way the ocean liner business makes rates and negotiates contracts with shippers. In the past, the service contracts were filed with the Federal Maritime Commission. Shippers could look at the agreement's terms and demand the same rates. The measure does away with this "me-too" option and allows shippers to negotiate service contracts in secret.

Contracts will still have to be filed with the FMC so it can watch for antitrust violations and some essential terms of an agreement will still be publicly available.

For the full story, see the May 10 print edition of Transport Topics. Subscribe today.

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