The United Nations (UN) liner code was formulated to cover the following fundamental objectives and basic principles:
- The purpose of UN liner code is to facilitate the orderly expansion of world seaborne trade;
- The objective is to stimulate the development of regular and efficient liner services adequate to the requirement of the trade concerned;
- The objective is to ensure a balance of interests between suppliers and users of liner shipping services;
- The principal that conference practices should not involve any discrimination against the ship owners, shippers or the foreign trade of any country.
- The principal that conferences hold meaningful consultations with shippers organizations, shippers representatives and shippers on matters of common interest, with, upon request, the participation of appropriate authorities;
- The principal that conferences should make available fo interested parties pertinent information about their activities which are relevant to those parties and should publish meaningful information on their activities.
The UN Liner Code provides the following things:
- The positive role of the Government to regulate shipping conference.
- 40:40:20 principles in the carriage o overseas trade;
- Outside competition;
- A majority say for the shipping lines of trading parties in conference decisions;
- Stability to freight rates for 15 months;
- 150 days notice by the conference for any general rate increase.
- Consultations based on cost data justifying rate increases;
- Promotional freight rates for non-traditional items;
- Re-orientation of loyalty agreements;
- Mandatory conciliation to resolve disputes; and
- Review conference after every 5 years.
The convention came into force in October 1983, almost one decade after its adoption. In India, the Convention was ratified in 1978, but no legislation has ben passed in this regard. Consequently, the provisions of the code remain unimplemented and the consultation mechanism has not been working properly.