Liner woes not our fault, say shippers

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Liner woes not our fault, say shippers

2009-9-21
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The outlawing of liner shipping cartels was not responsible for the hardships being suffered by the container shipping industry, the Global Shippers' Forum (GSF) said after its annual meeting in London.

"The members of GSF determined that the hardships being realised in recent months and weeks by some within the liner shipping industry were a direct consequence of the economic conditions and could not be attributed to nor were they exacerbated by the reform of EU competition law and the consequent outlawing of liner shipping conference cartels on trades to and from Europe," the GSF said in a statement.

"Regulatory reform in European competition law affecting liner shipping coincided with the onset of the most severe and sudden global economic recession for many decades."

For 20 years, the EU Block Exemption Regulation 4056/86 allowed liner conferences to fix prices and regulate capacity, but this was outlawed on October 1 last year when the EU Council scrapped the block exemption.

The increasingly influential GSF comprises the Asian Shippers' Council, the Canadian Industrial Transportation Association, the European Shippers' Council and the National Industrial Transportation League from the US.

In their joint declaration after the annual meeting, the GSF said it was widely accepted by GSF members that the liberalisation brought about through regulatory reform enabled the liner shipping sector to "achieve efficiencies and operating practices, which will achieve viable and competitive options for its customers".

It said that he legitimate use of agreements in any business should not be taken advantage of for the purposes of reducing competition or collectively managing capacity in order to raise rates.

In its declaration, the GSF urged Asia-Pacific countries in APEC to monitor non-rate making agreements to prevent anti-competitive behaviour and distortions of trade.

Shipping lines are protected from anti-trust regulations in Singapore and Hong Kong, a source of great bitterness among Asia's shipper community.

This is largely because the two busy maritime cities are wary of upsetting carriers, especially in Singapore. The Southeast Asian city fears a radical change to the competition law affecting shipping may impact its compulsive drive to become an "international maritime centre".

The GSF said it would urge the Asian governments to initiate reforms that were in line with competitive global practices.

"Asia will remain the focal point for the GSF campaign on such regulatory reform of the liner shipping sector," the joint statement said.

The GSF was critical of the way security, customs and trade issues were being handled and called for more cooperation between security organizations and the freight transport industry.

"Security, customs and trade have become inextricably linked in terms of policy. Secure transport is vital to maintain in order to reduce the risks to supply chains, the economy and society," the statement said.

"Security officials should consult with the freight transport industry with a special emphasis on the shipper community that results in the development of policies that reflect the commercial needs of everyone involved in the movement of international commerce.

"Customs agencies around the world have a responsibility to carefully balance the needs for a safe and secure international supply chain without crippling the very transport systems that they seek to protect."

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Liner woes not our fault, say shippers

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