Control over agreements and practices of ocean common carriers in United States foreign commerce is exercised out of Washington by the Federal Maritime Commission (“the FMC”) under the Shipping Act 1916, as amended (“the Act”)1. Pursuant to s. 15 of the Act2, concerted activities of ocean common carriers in the U.S. trades are exempt from the U.S. antitrust laws if they are authorised by agreements approved by the FMC3. Agreements on rates and practices between common carriers in the U.S. trades must be filed for approval, and if approved are subject to FMC supervision under the Act’s provisions and the FMC’s regulations elaborating on those provisions. The major approved agreements are the shipping conference agreements covering rates and practices in the various inbound and outbound U.S. foreign trades4.

In the 60 years since passage of the Act, the U.S. Department of Justice has sought to whittle down the control exercised by the FMC and its predecessors5 over competition in this industry. Other critics of the exemption also have argued that it should be modified or eliminated6. A pending development is the completion of a report on the subject by the Justice Department Antitrust Division’s recently-established “Regulatory Reform Unit7.” Previous positions and comments of the Justice Department and its officials make it likely this group’s report will espouse an anti-conference view and argue anew for a narrowing or repeal of the Act’s antitrust exemption. This article will discuss the advisability of such action.

In the late 1800s, in response to a shipping industry crisis precipitated by excess capacity and resulting rate wars, ocean shipping conferences were created. The fundamental purpose of conferences was to preserve economic stability, as was recognised by both of the major investigations into their practices prior to passage of