Sher & Blackwell LLP, Attorneys

The coming year brings an unusual number of potentially significant changes in the legal environment affecting container carriers. At the top of the list is the growing number of international (and U.S.) proposals designed to limit emissions from vessels. This issue will have great impact on the industry. Second, there is the European Commission’s pending proposal to narrow the EU block exemption that shields carrier consortia from the applicability of EU competition laws. A lesser-recognized but intriguing development is the emerging visibility of the Federal Maritime Commission. The low profile that the FMC had for a number of years is over. Last year, a House subcommittee held two hearings on the functioning of the FMC. The result was a scathing attack on the agency. Since these congressional hearings, and perhaps because of them, the agency has become more active and engaged. At the close of 2008, the FMC, for the first time, filed an action in federal court seeking to enjoin certain aspects of an agreement filed with it. The agreement is one between the ports of Long Beach and Los Angeles providing for a port truck-replacement program designed to improve air quality. The FMC challenged provisions in the agreement dealing with labor requirements and incentive fees, although it did not challenge the truck-replacement program itself. Labor and environmental groups, strong supporters of the Obama administration, have criticized the FMC’s action. It will be interesting to see whether this new FMC visibility will enhance its stature or simply make it a political target. One common thread missing from these activities is the glaring lack of coordination between the economic and environmental regulators of shipping. In Europe, competition regulators are threatening efficiency in the name of competition at the same time environmental regulators seek greater efficiencies to curb emissions. Although the FMC is not challenging the environmental protection components of the ports’ clean-trucks program, that plan is nevertheless caught up in a regulatory system that is not designed to consider environmental regulations. Is this a regulatory system at odds with itself, or perhaps a system that has simply not set necessary priorities? That question needs an answer.