OCEAN SHIPPING ECONOMICS - FREE-TRADE AND ANTITRUST IMPLICATIONS

Many economists and antitrust experts claim that ocean shipping confer ences are essentially legalized cartels. They often advocate eliminati ng ocean shipping conferences' antitrust immunity. This paper argues t hat conferences also help to coordinate their members' joint investmen ts and thereby allow the historically small firms in this industry to exploit vast network economies (akin to those in other transportation industries) that small firms could not capture on their own. The paper proposes reducing rather than eliminating immunity and calls for an e nd to many of the regulations currently stifling the industry.