Car Carriers Win Joint Bargaining for Tug Services

Glovis
File image via social media

By MarEx 2017-01-23 18:07:24

Last week, the Federal Maritime Commission voted four to one to allow Wallenius Wilhelmsen Logistics, Eukor Car Carriers, American Roll-on Roll-off Carrier and Hyundai Glovis to jointly negotiate the price of tug services in American ports. 

American anti-trust laws make it illegal for American firms – like U.S-flag tug operators – to collaborate in the same manner, observes Commissioner William P. Doyle. In a statement, he pointed out that the agreement "reaches beyond the scope of the Shipping Act of 1984," the statute that allows ocean carriers to act jointly in negotiating with marine terminals. "U.S.-flag tug service providers are not ocean common carriers and they are not marine terminal operators," he said. "Under this amendment, we are now witnessing the use of the Shipping Act to actually undermine the U.S.-flag domestic fleet, in this case tugboat operators . . . [This amendment] opens the door to anticompetitive behavior resulting in adverse consequences for U.S.-flag maritime service providers, their mariners, and the domestic shipyard industry." 

FMC chairman Mario Cordero disagreed. "Careful analysis of what was proposed yielded no concerns about potential anticompetitive behavior or adverse consequences to ports, or the American shipper," he said in a statement on Thursday.

Two of the lines that are party to the agreement have paid millions to settle allegations of anticompetitive behavior. Four months ago, WWL and sister company Eukor paid $1.5 million in civil penalties to settle an FMC case alleging antitrust-related violations of the Shipping Act. In addition, Eukor and WWL have been fined a combined $150 million by Chinese and American regulators on charges of anti-trust violations. Japan's Fair Trade Commission has fined WWL and three others on similar charges, and Eukor and WWL are defendants in related class-action suits brought by shippers. 

Eukor, ARC and WWL are to be merged under the WWL brand within the first quarter of the year, which may reduce the scope of the new FMC amendment to a joint negotiating agreement between Hyundai Glovis and WWL.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

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