An Economic Analysis and Study of the Ocean Liner Shipping Industry in Response to the Ocean Shipping Reform Act of 1998
Mendez, Sylvia L.
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The purpose of this paper is to determine how small, medium and large shippers react to changes in the ocean-liner shipping industry under the Ocean Shipping Reform Act (OSRA) of 1998. The focus is on the importance of negotiating contracts with carriers and the choice to use either a shipper's own leverage or the leverage of a third-party agent. I hypothesize that large shippers wi11 be more supportive of OSRA when negotiating favorable rates than small shippers. Data were collected from a wide variety of companies that ship from Pacific Coast ports to Asia. Our analysis implies that OSRA forces shippers to rely on their own clout or that of a third-party agent to gain desirable service contracts. Finally, the research describes desirable shipments from the perspectives of both carriers and the shippers.