MarAd To Study Liner Segment Of U.S. Merchant Fleet

Harbridge House has been contacted by the Maritime Administration to perform what may be one of the most far-reaching studies ever of the liner segment of the U.S. merchant fleet.

The study will explore the berth line operators in, basically, three possible economic settings: 1. Continuation of the existing "open" conference system.

2. A "closed" conference system such as exists in many foreign- to-foreign trades.

3. Removal of antitrust immunity from the existing rate-making conference systems to make for a more competitive environment.

Harbridge House, a major economic consultant firm with experience in ocean shipping, has put Raymond J. Waldman, former Deputy Assistant Secretary of State for Transportation and Communications, in charge.

The study, to be completed sometime next year, will shy away from concrete proposals, but will forecast the likely future impact on U.S. liners of the three different conference situations.

The study could well be completed about the time Congressional committees, especially the House Merchant Marine and Fisheries Committee, begin to turn their attention to other areas of the U.S. merchant fleet besides tankers.

U.S.-flag liner companies increasingly participate in cargo pools and cargo-sharing arrangements with Federal Maritime Commission (FMC) approval.

They also have been increasingly concerned at what they conceive to be a too accessible U.S.

trade where virtually all comers are free to move in and out as shipping markets weaken and strengthen elsewhere.

The consequence is, in their view, that the U.S. foreign trades have become a "dumping" ground for surplus tonnage with the result that as rates in the U.S.

trades tend to become depressed and cargo scarcer, hard-pressed carriers then begin to indulge in cargo-attracting measures—such as rebating —• which are illegal and are currently under intensive scrutiny by FMC.

Rep. John M. Murphy (D-N.Y.), of the House Merchant Marine and Fisheries Committee, has completed an extensive two-year study of all aspects of the ocean shipping industry.

He has indicated he plans to examine the possibility of changes in the regulation of conference systems, including the so-called closed conferences which are empowered to limit severely the admission of new lines to these rate-making bodies.

The Harbridge House study will examine the more specific recent developments in the liner trades such as cargo sharing, the "dumping" of surplus foreign-flag carriers into the "open" U.S. trades, and the pending code of liner conduct, worked up under United Nations auspices, which is intended to give merchant fleets of underdeveloped countries a competitive chance against the fleets of established maritime countries by a universally agreed-to cargo sharing system.

Other stories from October 1977 issue


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