The two methods through which Congress chose to regulate the shipping industry's practices were public disclosure and governmental review of all intercompany agreements, and tariff rates, regulations and practices. Public disclosure permits a shipper to easily discover its rights and obligations vis-a-vis any common carrier without fear of surprise. Any deviation from its public filings subjects the line (or lines) to civil penalties. 75/

Section 15 requires all persons subject to the Shipping Act 76/ to file with the FMC for its approval of every agreement, understanding or other arrangement with other persons also subject to the Act which affects competition. 77/ It has been held that FMC jurisdiction includes labor agreements that effect snipping even though some

75/ Violation of the public filing requirements of SS 14b, 15 and 18 (b) is punishable by a civil penalty of $1000 for each day the violation continues.

76/ Persons subject to the Act in addition to "common carriers by water" are forwarders and terminal facility operators. Shipping Act of 1916, § 1, 46 U.S.C. S 801

(1970).

77/ 46 U.S.c. § 814 (1970). The Commission's predecessor
agencies held that the word "every" did not include
"routine action relating to rate changes and other
day-to-day transactions." Ex Parte 4, Section 15
Inquiry, 1 U.S.S.B. 121, 125 (1927); accord, Empire
State Hwy. Transp. Ass'n v. FMB, 291 F.2d 336 (D.C.
Cir.), cert. denied, 368 U.S. 931 (1961). Congress
has granted the Commission authority to exempt de
minimis agreements from $ 15. Act of Nov. 6, 1966,
Pub. L. No. 89-778, adding Shipping Act of 1916, S
35, 46 U.S.c. $ 833a (1970).

parties may not be persons subject to the Act. 78/ Modifications and cancellations of agreements must also be filed with the Commission.

Oral agreements must be reduced to writing

and filed. 79/ Finally, the statute expressly treats a carrier
conforming to an agreement between other carriers as if it
were a party to that agreement. 80/ Section 14b, which was
added in 1961, requires carriers to file with the FMC all
dual rate contracts, and modifications and cancellations
thereof. 81/

Section 18 (b), also added in 1961, requires all
carriers in foreign commerce to file with the Commission
their tariff rates, classifications, rules and regulations
and any changes thereto. 82/ Section 20, on the other hand,

78/

United Stevedoring Corp. v. Boston Shipping Ass'n, 16 F.M.C. 7, 9-10 (1972); accord, New York Shipping Ass'n,-N.Y.S.A.-I.L.A. Man-Hour/Tonnage Method of Assessment, 16 F.M.C. 381 (1973), aff'd sub nom., New York Shipping Ass'n v. FMC, 495 F.2d 1215 (2d Cir. 1974).

79/ See, e.g., Unapproved Section 15 Agreements--South
African Trade, 7 F.M.C. 159, 184-91 (1962).

80/ Shipping Act of 1916, § 15, 46 U.S.C. § 814 (1970):

That every common carrier by water

shall file immediately with the Commission a true

copy.
carrier

of every agreement with another such to which it may . . conform in whole or in part . .

81 Act of Oct. 3, 1961, Pub. L. No. 87-346, § 1, adding
Shipping Act of 1916, § 14b, 46 U.S.C. § 813a (1970).

82/ 46 U.S.c. § 817(b) (1970), formerly Act of Oct. 3,
1961, Pub. L. No. 87-346, § 4, 75 Stat. 764. The sub-
section exempts bulk commodities and softwood lumber
from its filing requirements. Carriers may sell copies
of their tariffs for no more than a reasonable fee.

88-934-77 - pt. 2 - 5

protects shippers from unauthorized release of confidential

competitive information about their shipments. 83/

(2) FMC Approval/Disapproval Powers

In addition to requiring carriers to publicly file their tariffs and anticompetitive agreements, the

Shipping Act imposes government review of such activities. Before a dual rate contract under Section 14b or an anticompetitive agreement under Section 15 can take effect, the FMC must approve it. The Commission must disapprove such contracts and agreements that it finds to be discriminatory or unfair to shippers or ports, detrimental to United States commerce or to be contrary to the public interest. 84/ Both sections contain more specific provisions, violations of which require the FMC to disapprove agreements or contracts previously approved by it.

Congress added the public interest standard to Section 15 in 1961 as part of its overall revision of the Act. 85/ The Commission has held that the standard

84/ Shipping Act § 15, 46 U.S.C. S 814 (1970), also requires the FMC to disapprove anticompetitive agreements which are discriminatory or unfair towards other carriers or which violate other provisions of the Act.

85/ Act of Oct. 3, 1961, Pub. L. No. 87-346, S$ 2,

amending Shipping Act of 1916, § 15, 46 U.S.C. S 814 (1970).

requires:

The parties seeking exemption from the anti-
trust laws for their agreement must demonstrate
that the agreement is required by a serious
transportation need, or in order to secure
important public benefits. Otherwise.
it is our view that the public interest in
the preservation of competition where
possible, even in regulated industries, is
unduly offended, and the agreement is
contrary to that interest within the

meaning of section 15.

Disapproval of an agreement on this basis

is not grounded on any necessary finding that it
violates the antitrust laws but rather
because the anticompetitive activity under
agreement invades the prohibitions of

the antitrust laws more than is necessary
to serve the purpose of the Shipping
Act and is therefore contrary to the
public interest. 86/

The Supreme Court upheld the use of this antitrust

standard as a permissible method of weighing the public interest. 87/

The FMC has not limited its enforcement of the public

86/ Investigation of Passenger S.S. Confs. Regarding Travel Agents, 10 F.M.C. 27, 34-35 (1966), rev'd sub nom, Aktiebolaget Svenska Amerika Linien v. FMC, 372 F.2d 932 (D.C. Cir. 1967), rev'd, 390 U.S. 238 (1968). See also Agreement No. 8660--Latin Am./Pac. Coast S.S. Conf. & Proposed Contract Rate System, 14 F.M.C. 172, 184-85 (1970), aff'd sub nom., Latin Am./Pac. Coast S.S. Conf. v. FMC, 465 F.2d 542 (D.C. Cir.), cert. denied, 409 U.S. 967 (1972) (application of Travel Agents standard to dual rate contracts).

87/ FMC v. Aktiebolaget Svenska Amerika Linien, 390 U.S. 238, 244-46 (1968).

interest standard to antitrust considerations.

Although

not charged with their enforcement it has at times

considered the policies behind Section 8 of the Merchant Marine Act of 1920, 88/ and Section 205 of the Merchant Marine Act of 1936. 89/

No prior approval is necessary for changes to "tariff rates, fares and charges, and classifications, rules, and regulations explanatory thereof", so long as the publication and filing requirements of Section 18 (b) are met. 90/ As described below, that section permits the Commission to disapprove a rate, albeit only after a hearing during which the carrier may continue charging the challenged rate. 91/Under Section 17, the Commission may proscribe regulations or practices

88/

46 U.S.C. S 867 (1970). See Investigation of Overland & OCP Rate & Absorptions, 12 F.M.C. 184, 222-24 (1969).

89/ 46 U.S.C. § 1115 (1970). See Associated Latin Am. Freight Confs. & the Ass'n of W. Coast S.S. Confs.,

Amended Tariff Rules Regarding Wharfage & Handling Charges, 15 F.M.C. 151, 154-58 (1972); Sacramento-Yolo Port Dist. v. Pacific Coast Eur. Conf., 15 F.M.C. 15, 22-23 (1971).

90/ Act of Oct. 3, 1961, Pub. L. No. 87-346, § 2, amending Shipping Act of 1916, S 15, 46 U.S.C. S 814 (1970).

91/

See text accompanying notes 257-266c, infra.