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Shipping Act Of 1984 Essay

610 Words3 Pages

Written by Tania Vela
Transportation Law
Professor Melasky
October 26, 2015

The Shipping Act of 1984
The United States Shipping Act of 1984 describes the law covering water transportation in the US foreign trade. The bill was later amended by the Shipping Act of 1998 but it still contains current regulations and is an important part of current shipping.
The the Shipping Act of 1916 was replaced by the Shipping Act of 1984 by President Reagan. This bill allowed the Federal Maritime Commission (FMC) to grant “antitrust immune status” to agreements made by shipping conferences. In other words, it allowed more competition by allowing agreements made by conference systems, which set the rates.
The purposes of the 1984 Act are:
“To prevent discrimination with …show more content…

”
Before the 1984 Act, ocean carriers had to comply with the conference system and as a result, conferences had oligopolistic power. A conference system was used by ocean carriers from the 17th century. The conference system allowed carriers to set freight rates.
The Shipping Act of 1984 gave greater independence and competition for ocean carriers. Ocean carriers could now use service contracts which allowed carriers to set “duration, volume and service level of shipments” (SCM Wiki). The FMC believed allowing contracts would increase competition between firms. With the 1984 Act, agreements become effective after 45 days unless the FMC intervenes, as opposed to agreements having to always be approved by the FMC which was time consuming and costly.
Although the 1984 Act resolved many issues in the 1916 Act, the 1984 Act still needed modification. Three of the main issues claimed at the Committee on Transportation and Infrastructure on February 2, 1995 as stated by Mr. Emmett were:
“It is unconscionable for ocean carriers to be able to set rates and restrict capacity under antitrust

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