Predatory Rate

Summary of Predatory Rate

An ocean freight rate set intentionally low so as to drive out competition. Soviet flag carriers, animated by motives other than commercial profit, were widely criticized for establishing predatory rates. Certain noncommunist carriers, enjoying heavy state subsidies, were also suspected of setting predatory rates. In 1980, Congress passed the Controlled Carrier Act, requiring sixty days' advance notice of rate reduction by any carrier controlled by a foreign state; during the sixty-day period, the Federal Maritime Commission will investigate allegations of predatory rate making and will invalidate the predatory rate.

(Main Author: William J. Miller)