The conferences are association of companies, resembling an ordinary cartel or trust, formed to control supply and prices and to limit entry into the trade. The Royal Commission of 1909 defined Shipping ring or conference as ‘a combination, more or less close of shipping companies formed for the purpose of regulating or restricting competition in the carrying trade on a given trade route or routes’. Shipping Conferences are formed only in a line trade and not in the tramp service, because the former is a more stable and regular organisation. Since the conferences are made for particular routes only, a shipping company may join many conferences on different routes. Likewise, the shipping companies may not join conference of a particular route and carry on independent business. The organisation of conferences varies. It may be completely formal or informal. A conference may have liners of various nationalities as its members and their purpose of alliance might differ from conference to conference.
To conclude that shipping conferences has two main objectives:
- To regulate competition between its members.
- To protect its members as a body against outside competition from tramps or non conference lines.
- Prevention of competition and protection of weaker lines: The organisation of conference regulates the competition among the liners by entering into agreements on subjects like fixation of rates, allocation of traffic and other sailing conditions. It curtails the unhealthy competition among the liners and protects the weaker liners, which otherwise would have been ousted in free competition.