Question

Factors which contributed to decline of the conference system

Answer 1

Industry has become apparent to United States policy makers, as third

world and certain industrialized nations have tended to enter into bilat-

eral agreements or place certain cargo restrictions on their trade. At the

same time the United States has assumed a greater dependence on inter-

national trade for its economic well-being.

The United States liner industry, both in its competitive rate struc-

ture and in the competitiveness of United States based flag companies,

has been declining for at least the past decade. This decline has

prompted policymakers to propose that the United States liner confer-

ence system be deregulated. Generally, two themes underlie these pro-

posals: an elimination or weakening and streamlining of the regulatory

powers of the Federal Maritime Commission (the United States is one of

the few nations with a regulatory agency exclusively devoted to regulat-

ing the conference system), and a strengthening of the conferences' anti-

trust immunity. Because such legislation is antithetical to traditional

concepts of United States domestic competition policy, previous Con-

gresses failed to enact reform legislation. On March 20, 1984, however,

President Reagan signed the Shipping Act of 1984, which comprehen-

sively restructured the United States maritime laws. While this Act

culminates seven years of attempted maritime reform by the Congress, it

is compromise legislation, merely a step toward a more fundamental re-

thinking of United States maritime policy. The Act authorizes the crea-

tion of a Presidential Advisory Commission at the end of this decade that

will ascertain the need to further strengthen the conference system and

reform the United States regulatory policy.

This article addresses one of the concerns of opponents to such re-

form measures: the protection of shippers' interests through the creation

of shippers' councils.