[sayhar]

This is a great article.

Rabbitholed a tiny bit on this part:

> Big companies got the law changed to enable ocean carriers to offer secret discounts in exchange for volume guarantees.

To an article linked in the first article: https://www.hklaw.com/en/insights/publications/2018/12/congr...

> The last amendment to the Shipping Act occurred in 1998 as the Ocean Shipping Reform Act of 1998, following a five-year study of the effect of the Shipping Act on maritime trade and commerce. The 1998 amendment allowed carriers and shippers to enter confidential rate agreements providing discounted rates in exchange for cargo volume commitments. In 2005, the FMC issued a regulatory ruling extending authority to non-vessel operating common carriers (NVOCCs) to enter such confidential rate agreements with shippers.

> After the 1998 amendment, the maritime industry experienced significant and widespread consolidation. In addition to carrier mergers and acquisitions concentrating the bulk of containership capacity in U.S. trades to fewer than a dozen large carriers, the formation of vessel carrier alliances caused further substantial consolidation. Currently, there are three major carrier alliances representing 80 percent of all container trade. Within the alliances, there has been further consolidation, e.g., the creation of Ocean Network Express (ONE) by the merger of Japanese carriers.

Damn.

[preston4tw]

I relatively recently read a biography on John D. Rockefeller and this reminds me of some of the things Standard Oil did with rail companies to gain a market advantage.

https://en.wikipedia.org/wiki/Standard_Oil#Monopoly_charges_...

Rabbithole indeed. Here's notes from a meeting of the HoR Judiciary Committee in 1999, "ANTITRUST ASPECTS OF THE OCEAN SHIPPING REFORM ACT OF 1998": http://commdocs.house.gov/committees/judiciary/hju62447.000/...

TIL that ocean carriers have apparently been exempt from antitrust laws since ~1916.

[efitz]

Well there’s your problem right there. Regulatory capture with a heaping helping of crony capitalism.

[chermi]

But you repeat yourself!

[jml7c5]

Is the cause-and-effect correct here? There are huge advantages to consolidation, so one would expect it to happen regardless.

Also note that Holland & Knight aren't unbiased observers. They are paid to lobby on behalf of clients, and do a decent trade in the politics of shipping: https://projects.propublica.org/represent/lobbying/search?se...

[sayhar]

Well, consolidation didn't happen for decades, then it happened rapidly after the law was changed, so that's pretty clear evidence to me.

I don't think you could accuse Matt Stoller of being in the pocket of any industry, and here's a similar take from him: https://mattstoller.substack.com/p/too-big-to-sail-how-a-leg...

[Negitivefrags]

Why would you not be able to enter into such an agreement?

Basically everywhere in business people negotiate bulk rate discounts. And why wouldn’t they?

Often businesses will only agree to a deeper discount if you agree not to tell others what rate you got.

It seems odd to me that this wouldn’t be allowed.