After the epidemic, freight owners and logistics enterprises in Europe and the United States are increasingly settling accounts for container liner companies.
It is reported that recently, 10 major shippers and forwarder organizations from Europe have once again signed a letter asking the European Union to adopt the ‘Consortia Block Exemption Regulation’ which allows shipping companies to do whatever they want. CBER) conduct a thorough investigation!
In a letter to EU executive Vice President Margrethe Vestager, the shippers disputed a previous view by the EU’s anti-competition committee that the shipping market was highly competitive and in line with CBER guidelines.
Several European forwarder organisations, including CLECAT, Europe’s largest forwarder logistics association, have started a complaint and representation process within the EU since last year, but the outcome does not appear to have changed the position of European competition regulators, which insist it is keeping a close eye on market mechanisms in the liner shipping industry.
But a new report from the International Transport Forum (ITF) suggests that the EU’s conclusions do not hold water!
European shippers claim the report shows “how the actions of global routes and their alliances have increased rates sevenfold and reduced capacity available to European customers”.
The letter notes that these routes have allowed shipping companies to make $186 billion in profits, with margins rising to 50 percent, while reducing capacity into Europe because of reduced schedule reliability and service quality.
Shippers argue that these “excess profits” can be directly attributed to alliance block exemptions and “preferential terms” that allow carriers to operate within European trade routes.
“Regulation appears unable to adapt to the significant changes in this market over the past few years, including the development of information standardization and exchange, the acquisition of other supply chain functions by shipping companies, and how shipping companies have been able to exploit these to supernormal profits at the expense of the rest of the supply chain,” they wrote.
The Global Shippers Forum said the European Commission had commented that there was “no illegal activity” on the routes, but GSF director James Hookham said: “We believe this is because the current wording is flexible enough to allow all the necessary collusion.”
CLECAT has previously called on the Commission to investigate the collective exemption of container liner companies, vertical integration, consolidation, data control and the formation of market dominance in the context of the review of the Consortium Collective Exemption Regulation (CBER) under EU competition rules.
Nicolette Van der Jagt, Director General of CLECAT, commented: “Vertical integration in the container shipping industry is particularly unfair and discriminatory as operators enjoying exemptions from normal competition rules are using windfall profits to compete against other industries that do not have such exemptions.”
She added: “Alliances are also problematic as fewer carriers lead to fewer route choices, constraints on capacity supply and market dominance, which in turn enables some carriers to differentiate between larger BCO, smes and freight forwarders – which in turn leads to higher rates for everyone.”
Post time: Jul-28-2022