The National Industrial Transportation League, the nation’s largest shipper organization, urged the U.S. Federal Maritime Commission to “closely examine the ramifications and impacts” of a plan by the Transpacific Stabilization Agreement (TSA) to include the U.S.-to-Asia as well as Asia-to-U.S. trade.
TSA currently makes up about 90 percent of the available carrier capacity operating in the Asia-to-U.S. trade. Under the amendment, the carrier group has proposed to expand its geographic scope and authority to include the U.S.-to-Asia trade now operating under the Westbound Transpacific Stabilization Agreement (WTSA). Under the proposed new structure WTSA would cease to exist.
Under U.S. law, carrier agreements such as TSA are permitted limited antitrust immunity to engage in certain collective activities, the NIT League noted.
Bruce Carlton, president and chief executive officer of the group, said the FMC needs to review the amendment carefully to, “ensure that it fully serves the interests of shippers as transportation buyers, in addition to the carrier members of the TSA.”
Carlton noted “under the auspices of the WTSA, a shipper advisory board was organized by the carrier group to address and resolve operational difficulties such as those that manifested themselves in early 2010 when seasonal and geographic imbalances resulted in alarming service failures that proved harmful to U.S. exporters.
“With the disbanding of the WTSA, it is unclear whether provisions have been made to continue this panel so as to avoid a repeat of the problems that proved harmful to thousands of U.S. companies,” he said.
“Another key uncertainty for many U.S. shippers is whether service contracts from members’ lines will be impacted by the expanded geographic scope of the proposed amendment,” Carlton said. “Should companies anticipate that the expanded agreement will influence service contract negotiations or result in changes in their service when both east and westbound operations are being brought under a single administrative entity?”
Carlton emphasized the NIT League was not challenging or objecting to the changes, but believed the FMC “should exercise all due diligence to ensure that the proposed amendment to the TSA does not impede the ability of U.S. companies to have fair and competitive services in these most important trade lanes.” – Chris Dupin
NIT League wants FMC to ‘closely examine’ proposed TSA-WTSA merger
