The 1984 United States Shipping Act sought to establish a balance between the interests of shippers, carriers and the general public interest in the maintenance of effective competition in the industry. Increased antitrust immunity for shipping conferences was combined with provisions requiring that conferences allow members to set individual tariff rates on 10 days notice (“Mandatory Independent Action”) and an acknowledgment of the legality of “service contracts” (which have supplanted the traditional dual rate/loyalty contracts outlawed by the 1984 Act) under which shippers and carriers agree to provide a certain minimum quantity of cargo or shipping space at a certain tariff rate within a certain period.

Since the passage of the Act, Mr Shashikumar argues, the global recession and extreme overtonnaging in international shipping have combined to shift the balance of economic power away from the conferences and towards shippers, and consequently modifications of the legislation are necessary to restore the equilibrium at which Congress had aimed. After reviewing the background to the 1984 Act and the state of the shipping industry in recent years, he suggests that the statutory provisions on mandatory independent action and service contracts might have added fuel to the fire, further weakening ocean common carriers in the U.S. trades.

The heart of the study lies in an analysis of those two sets of provisions, based partly on