Washington News: A member of the House of Representatives wants to give the Federal Maritime Commission (FMC) more power to crack down on collusion in shipping agreements among foreign shipping companies.

On Monday of this week, California Democratic Representative John Garamendi introduced the Ocean Shipping Competition Enforcement Act, which would allow the FMC to block any unfair anti-competitive agreements between carriers and ocean terminal operators without having to first obtain a federal court order.

Currently, the FMC cannot block an anti-competitive agreement it deems unreasonable on its own. Instead, it must petition the U.S. District Court for the District of Columbia and persuade the court to do so.

Garamendi said in introducing his bill, "Today, the industry is dominated by nine foreign-flagged ocean carriers, which openly collude under the cover of three airline alliances, handling roughly 80% of our cargo. That is why the U.S. Congress must ensure that the Federal Maritime Commission can do its job and fully enforce its laws."

"Fair, competitive markets and good governance, that's what our bipartisan bill seeks to ensure," Garamendi said. This legislative proposal was put forward in response to two FMC commissioners' request to Congress to amend current maritime laws that force the FMC to seek relief in federal court. FMC decisions could be appealed to the U.S. Circuit Court of Appeals. Parties seeking to operate under an agreement will have the opportunity to prove that the agreement is not unreasonably anti-competitive."

Garamendi and Republican Representative Johnson have been leading a bipartisan effort in the House to tweak and improve last year's Ocean Shipping Reform Act, "to reform the ocean shipping industry to address global supply chain bottlenecks and better protect U.S. businesses and consumers from the price gouging practices of foreign ocean carriers."

These efforts include reintroducing in March of this year the Ocean Shipping Antitrust Enforcement Act, which would repeal foreign shipping companies' exemptions from all federal antitrust laws and address unfair practices.

But the World Shipping Council (WSC) has objected to the proposed reforms. Bud Darr, Executive Vice President of the world's largest container shipping company, MSC, spoke on behalf of the WSC at a hearing in Washington last month, saying that the proposal to terminate carrier antitrust exemptions "is fraught with quite a bit of danger and unintended consequences."

Regarding the Ocean Shipping Competition Enforcement Act, WSC President and CEO John Butler asserted that the bill "is based on the flawed premise of carrier agreements on rate-setting. The shared capacity space for carrier agreements under current shipping law provides the most efficient way possible to provide more service to more ports, including smaller ports. The Federal Maritime Commission itself will find that competition in this industry is already very intense. This bill is a self-inflicted solution to a problem."