Opinion ID: 411639
Heading Depth: 3
Heading Rank: 1

Heading: The Effects on Intermodal Transportation

Text: 188 I find it difficult to understand how as critical an issue as the immunization from the antitrust laws of intermodal transportation can be decided without a full airing of the economic effects of this expansion of section 15 authority. The decision has the potential to significantly affect the economics of intermodal carriers, all-water carriers, conference carriers, and independent carriers. 189 Intermodalism, although existing in embryonic form in 1916 when the Shipping Act was passed, did not become a major factor in the transportation industry until the advent of containerization in the late 1950's. It has since been hailed as the wave of the future, in large part because it is supposed to lead to the reduction of shippers' costs. See Note, Containerization and Intermodal Service in Ocean Shipping, 21 Stan.L.Rev. 1077, 1090-91 (1969) (Intermodal service offers the shipper both internal savings and procedural simplification .... The combination of containerization and intermodal service creates a reinforcing effect and provides savings and service options that neither could offer independently.). The nonconference carriers like Seatrain and United States Lines pioneered the transition to intermodalism; the carrier conferences, despite the FMC's encouragement, delayed implementation of intermodal innovations. Chief Judge Wright wrote in Seatrain II, 194 U.S.App.D.C. 370, 377, 598 F.2d 289, 296 (1979): 190 [i]t seems at best naive to expect a cartel, which has no more important purpose than preserving stability in its industry, to pioneer innovations .... Thus conferences might well be viewed as less effective vehicles for implementing intermodal service. 191 This agreement threatens to depress even further any incentive for conference members to enter into intermodal ventures by doing away with competition between water and intermodal carriers and artificially equalizing their rates. 192 The ultimate issue in this case is who, if anyone, will benefit from the admitted economies of containerization and intermodalism: shippers and their customers or the carrier cartels. See Final Report of the National Transportation Policy Study Commission: National Transportation Policies Through the Year 2000 at 286 (1979); Schmeltzer & Peavey, Prospects and Problems of the Container Revolution, 1 J.Mar.L. & Com. 211 (1970); Note Coordination of Intermodal Transportation, 69 Colum.L.Rev. 247, 252 (1969); Note, Containerization and Intermodal Service in Ocean Shipping, 21 Stan.L.Rev. 1077, 1095-96 (1969); 9 McGee, Ocean Freight Rate Conferences and the American Merchant Marine, 27 U.Chi.L.Rev. 191, 226 (1960). 193 Intermodal arrangements can embrace an infinite variety of combinations, including cross-country surface as well as international air hauls. By allowing all water conference carriers to agree with minibridge land and air carriers on through rates from any point of origin to any destination, the Commission is excluding from the reach of our antitrust laws and the free market a momentous transportation development, not remotely anticipated by the drafters of section 15 in 1916, without any kind of full airing of the effects of such insulation on the transportation industries, shippers and customers. 194