Service contracts—An instrument of international logistics supply chain: Under United States and European Union regulatory frameworks

Service contracts have emerged as an important instrument to secure a long-term relationship between carriers in the container shipping industry and shippers requiring scheduled services covering a global market. This contract, entered into largely on an individual and confidential basis, continues to enjoy anti-trust immunity under current United States and European Union regulations. It will continue to be in place even after the EC Council Regulation 4056/86 is repealed in October 2008 although it may operate in a modified way because of the absence of the common external conference tariff. This article examines the implications of this instrument on the international supply chain and explores its future role in defining efficiencies in international trade flows.