Shipping Conferences Exemption Act

Act: Shipping Conferences Exemption Act, 1987, S.C. 1985, c. 17
Regulation: Not applicable.

To Whom Does This Apply?

All shipping conferences serving Canada are entitled to the exemption provisions of the Shipping Conferences Exemption Act (SCEA), 1987 providing they comply with the requirements of the SCEA. Shippers can file a complaint with the agency on non-compliance issues.

Summary

The Shipping Conferences Exemption Act (SCEA) is shipping legislation that exempts shipping conferences (cartels of shipping lines) from the provisions of the Competition Act . Shipping conferences, which have two or more shipping lines as members, set joint rates and service conditions for transporting containerized cargo to and from Canada. The SCEA enables the shipping conferences to operate legally into and out of Canada without contravening the Competition Act which prohibits price collusion.

The SCEA is the current version of legislation that was enacted to permit cartels of shipping lines to serve Canadian import and export trade. Since Canada does not have an ocean merchant marine to handle its foreign trade, shipping lines of other nations must be relied upon to provide such services. Cartels of foreign shipping lines which set rates and service conditions jointly have existed for many decades and are accepted by most trading nations. For this reason, Canadian legislation was enacted to exempt these cartels from the provisions of the Competition Act which prohibit collusion between companies offering the same services.

Associations or cartels of shipping lines, referred to as conferences, are eligible for the exemption granted by the SCEA by complying with the requirements of the Act and upon the filing of certain documents with the Agency. Conferences must file a copy of the agreement drawn up between the shipping lines which sets out the aspects of service and pricing that the shipping lines agree to carry out jointly. The conferences are to file copies of all common tariffs with the Agency and notice of tariff increases must be filed at least 30 days in advance.

Notice of increases in surcharges (i.e. currency adjustment factors, terminal handling charges, fuel adjustment factors, etc.) must be filed at least 14 days in advance. The conference agreement must allow each member line to set rates that are different from those contained in the common tariff; this is referred to as the right to take independent action. Conferences are permitted to draw up confidential service contracts with shippers and copies of such contracts must be filed with the Agency. Under a service contract, a shipper agrees to ship a minimum volume of containers in return for a price that is usually below the regular tariff rate.

The SCEA prohibits conferences from drawing up contracts with inland carriers that specify payments to these carriers for inland transportation of cargo. Individual member lines of a conference may, however, draw up contracts with carriers for inland transportation.

The SCEA contains a complaint mechanism whereby a person may file a complaint with the Agency, if it is believed that a conference agreement or action reduces competition and results in an unreasonable increase in price or reduction in service.

Additional Information
For more information, you may visit the CTA Web site.

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Quebec Contact(s):
See National Contact.

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National Contact(s):
Ms. Danielle Pilon
Manager
Marine Complaints and Investigations
Canadian Transportation Agency
Terrasses de la Chaudière
15 Eddy Street
Gatineau, Quebec  K1A 0N9
Telephone: (819) 997-8354
Fax: (819) 953-5686
E-mail: maritime.cta@cta-otc.gc.ca