The Justice Department yesterday told the Federal Maritime Commission that it has no authority to approve agreements between ocean shipping companies that seek to fix rates for both ocean and surface transportation.
Antitrust Division officials said competition among shipping firms could increase significantly, bringing benefits to consumers if the FMC goes along with the Justice Department position.
The department's comments were filed in response to a request made to the FMC by the Pacific Westbound Conference for continued authority to fix rates for intermodal transportation service between the U.S. and the Far East when the current authority runs out March 20.
The Pacific Westbound Conference is an association of ocean carriers serving U.S. Pacific ports.
Currently, when U.S. exports or imports move under intermodal rates, the commission lets ocean shipping companies jointly fix the rates for both the land and ocean segments of the transportation. Generally, the merchandise is shipped in containers and is moved between ship and train by crane.
Not only does the FMC lack legal authority to extend the agreement, which grants antitrust immunity to the companies, but it lacked the authority to approve the agreement in the first place, the Department's peition contends. The first agreement has been in effect since Sept. 20, 1976.
The department argued that only the Interstate Commerce Commission has regulatory jurisdiction over the surface portion of any Intermodal rates, and the FMC may have jurisdiction only over the ocean portion.
"If the Commission accepts the Justice Department's interpretation of the law, competition among ocean shipping companies serving U.S. ports could increase dramatically," Hugh Morrison Jr., acting against attorney general in charge of the Antitrust Dvision, said yesterday.