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IS THE NEW OCEAN SHIPPING ANTITRUST ENFORCEMENT ACT IN THE US APPLICABLE IN 2023?

Late in Mar 2023, The Ocean Shipping Antitrust Enforcement Act was introduced in the US by California Democrats Jim Costa, John Garamendi, Josh Harder, Jimmy Panetta, and South Dakota Republican Dusty Johnson. This Act would address unfair practices that harm American businesses, producers, and consumers, such as unjustified container rate increases and refusing cargo bookings for American exports.

However, the World Shipping Council – WSC rejected the bill’s premise that carrier agreements are uncompetitive, and the group said it would work with the bill’s sponsors to understand their policy objectives. One of the issues mentioned in the rejection is the Vessel Sharing Agreement – commonly known as VSA. VSAs are purely operational agreements that enable carriers to share space on one another’s ships to maximize the usage of full vessel capacity as much as it can in each voyage which helps minimize the cost of transport. At the same time, vessel sharing allows more carriers to compete on a route, offering more frequent sailings and serving more ports. From a customer perspective, this means lower costs and better service, as well as reduced transport emissions.

Each member of a VSA determines its own commercial terms, including prices. Therefore, carriers within a VSA compete with each other, and with other carriers outside of that VSA, when selling their services to customers. Carriers also offer services outside of the VSAs in which they participate.

In the coming months, there would have a lot of arguments both ways – pros and cons to the Act. But we hope that the final will be decided quickly so that all parties compromise for mutual benefits.

By Thomas

Voltrans Logistics – Your Ware Our Care