On Tuesday, March 17, the U.S. House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust held a hearing entitled, “Pier Pressure: Regulation and Competition in Maritime Shipping.” The objective of the hearing was to discuss the state of maritime shipping and the impacts of the Shipping Act antitrust exemption on the global shipping space.  

Witness List 

Erika Douglas, Professor of Law, Beasley School of Law, Temple University 

Tony Rice, Senior Director of Trade Policy, National Milk Producers Federation and the US Dairy Export Council 

Richard Sicotte, Professor of Economics, University of Vermont 

Diana Moss, Vice President and Director of Competition Policy, Progressive Policy Institute 

Shipping Alliances in Global Maritime Transport 

Maritime shipping is an essential component of international trade and is responsible for almost 80 percent of goods traded across the globe by volume. At the center of this system are ocean carrier companies, which provide high-capacity transport between major ports via massive container ships that haul everything from cars to candles. These ocean carriers generally operate in concert with one another through shipping alliances, which are agreements between multiple carriers to manage operations and commercial activities together. There are several strategies employed by shipping alliances, including: 

• Vessel Sharing Agreements: a carrier will buy or sell slots on each other’s ships so that ships are operating at full capacity.  

• Coordinated schedules: carriers will coordinate departures and arrivals at ports to ensure consistent movement of goods.  

• Resource Sharing: carriers will set the number of ships for a particular service and utilize the vessel sharing agreements to move containers together. The workhorses of maritime shipping are massive container ships that carry up to 23,000 TEUs (twenty-foot equivalent containers). By pooling capacity, alliance members can utilize large container ships, which are quite expensive. Additionally, alliance members will share information to improve reliability across the alliance’s network.  

This cooperative model has produced a highly concentrated market. Currently, there are three main shipping alliances and one major independent carrier that dominate the maritime shipping space, as shown in the table below. Collectively, these alliances plus the independent carrier hold 82.9 percent of the global shipping container capacity.  

Table 1. Major Ocean Carrier Shipping Alliances

The two main advantages of shipping alliances are cost savings and efficiency gains. For carriers, sharing vessels reduces the need for any one carrier to move many ships at once, reducing the fuel and maintenance costs for each carrier. Coordinated schedules optimize movements to and from ports and ensure space is maximized on ships, improving efficiency. For exporters, the alliances offer them access to an extensive shipping network, expanding exporters’ reach into multiple markets.  

At the same time, these efficiencies do not always translate into benefits for exporters, and this hearing sought to explore some of the potential harms of this market concentration. For instance, one issue discussed by Tony Rice on behalf of the National Milk Producers Federation and the US Dairy Export Council is the impact to timely shipping service. In response to questioning from Rep. Mark Harris (R-NC), Rice suggested that exporters are often harmed when their cargo is postponed to a later service—a practice known as “rolling.” There is research that supports this concern. Shipping alliances engage in a practice called “skillful capacity management,” which is a practice of cancelling routes to intentionally control supply. While this helps carriers manage supply, it can leave an exporter’s goods stranded at ports and undermine exporters’ ability to deliver goods on time. 

Maritime Regulatory Power 

Shipping alliances are powerful players in maritime shipping but are subject to regulations in the countries they operate. In the United States, the regulatory body tasked with overseeing maritime shipping is the Federal Maritime Commission (FMC). The FMC is tasked with ensuring a competitive and fair shipping environment, investigating unfair practices, holding ocean carriers responsible for unfair practices, and overseeing agreements between ocean carriers.  

In their opening remarks, subcommittee chair Scott Fitzgerald (R-WI), and witnesses Rice and Erika Douglas argued that current US maritime law is limiting the FMC’s ability to ensure fair shipping competition in a space dominated by a small number of alliances. Their remarks refer to an exemption from antitrust laws for ocean carriers, first established by the 1916 Shipping Act. Under the current US Code—46 U.S.C. § 40307(a)—ocean carrier agreements are exempt from federal antitrust laws even if they fix rates or conditions of service; pool resources; allot ports; regulate the volume of cargo or passengers; engage in exclusive or preferential arrangements between carriers; or control competition, provided the carriers file the agreement with the FMC. The major shipping alliances have filed their alliance agreements with the FMC, granting them the antitrust exemption. In practice, the exemption gives alliances broad legal room to use vessel-sharing agreements, coordinate scheduling, pool resources, and manage capacity without facing antitrust action from the government. 

While specific carrier agreements are exempt from antitrust laws, the FMC is not entirely powerless. Under 46 U.S.C § 41307 (b), the agency can bring civil action to enjoin the operation of the agreement if it “likely produces an unreasonable reduction in transportation service or an unreasonable increase in transportation costs or to substantially lessen competition in the purchasing of certain covered services.” However, the FMC has not used this authority to challenge any of the shipping alliances. 

If the FMC were to use its power to challenge alliances, the alliances would likely point to the antitrust exemption as explicit permission to continue with their operations. They would also claim that practices like resource pooling and vessel sharing increase the efficiency of their services and reduce costs. More broadly, the potential for alliances to limit service to US ports as a result of an FMC civil action would dramatically decrease the US’s ability to participate in global trade, which is dominated by the alliances. 

Responding to Rep. Lance Gooden (R-TX), Douglas and Richard Sicotte presented policy options to strengthen the FMC’s ability to oversee international shipping in the face of what Douglas described as a “highly concentrated” and “anti-competitive” space. According to Douglas, the primary policy option is to remove the antitrust exemption prescribed in 46 U.S.C. § 40307(a). Removing the exemption would subject ocean carriers to antitrust laws. However, that change would likely need to be paired with revisions to 46 U.S.C § 40301(a), which currently allows agreements that “control, regulate, or prevent competition in international ocean transportation” filed with the FMC. Without revising that language, carriers filing agreements with the FMC would face legal uncertainty.  

There have been congressional efforts in the past to address the antitrust exemption, none of which have been successful. The Ocean Shipping Antitrust Enforcement Act of 2023 and the Free Market Antitrust Immunity Reform (FAIR) Act of 1999 both proposed to repeal the antitrust exemption. In 2023, the European Union successfully eliminated a similar exemption.  

Why Now? 

The hearing comes amid the ongoing spike in gas prices following the halt of oil shipping through the Strait of Hormuz and subsequent rise in crude oil prices. But Republicans made no indication that removal of the antitrust exemption will address gas price increases tied to oil shipments through the Middle East. As a result, the connection between the hearing’s subject and immediate concerns about high gas prices remained unclear.  

That disconnect was not lost on democratic members. Subcommittee Ranking Member Rep. Jerry Nadler (D-NY) and full Committee Ranking Member Rep. Jamie Raskin (D-MD) expressed frustration that the hearing was taking place at this particular moment. Rep. Raskin noted that while the topic of promoting competition in international shipping was important, discussions about specific maritime shipping laws do little to address the public’s immediate concerns about high gas prices, high food prices, and lack of housing affordability.  

However, the hearing points to a broader policy question. Beyond maritime shipping, the debate over alliances and antitrust exemptions feeds into a larger conversation about concentrated market power across sectors—from airlines to ticketing platforms—and how ensuring that such market power does not go unchecked.