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CLECAT has called on the European Commission to put the container shipping market under close scrutiny as the industry enters the third year of its Block Exemption from normal competition rules whilst services are at record low levels and rates continue to beyond reach for many of the clients of the forwarders, particularly SMEs. In the light of the recent market developments and the new vertical integration strategy of the Global Alliances, the Commission urgently must take the necessary steps to initiate a sector inquiry, so that it can use the results in its forthcoming review of the CBER. CLECAT is pleased to note that the co-ordination and discipline between shipping lines has attracted the attention of regulatory authorities around the world, most notably in the US, Canada, the UK, New Zealand and Australia. Only the EU has remained silent, yet four of the biggest shipping lines in the world fall within its jurisdiction.

Loadstar quoted CLECAT Director General Nicolette van der Jagt saying: “We urge [EC Commissioner] Mrs Vestager to also investigate the four biggest EU-owned container lines, MSC, Maersk, CMA CGM and Hapag Lloyd. In contrast to the EC approach, regulators in the UK, US, Australia, New Zealand and Canada have come together to launch a global investigation into a liner industry which made historically high profits last year and is on course to rake in similar amounts this year. She added: “The authorities include the most active enforcement authorities in the world (apart from the EU) the group of cartel busters no longer have significant commercial interests in national container liner shipping companies but are amongst the worst hit victims of the collusion on capacity and price hikes on the back of the pandemic.”

Welcoming the news on a pan-nation investigation, Olaf Merk, project manager for ports and shipping at the International Transport Forum (ITF) of the Organisation for Economic Co-operation and Development (OECD) told Splash on 22 February: “Coordination in monitoring and regulation of liner shipping is long overdue. It is a global industry, but there is no global regulatory approach on competition in liner shipping. Initiatives like these can help to address that governance gap.”

“This is a timely and welcome announcement that competition authorities around the world share shipper anxieties about how markets are behaving. Carriers should consider it a verbal warning over how rates and capacity are expected to behave as the world economy emerges from the pandemic and normal market forces re-apply themselves,” said James Hookham, a director at the Global Shippers Forum. Other global shipping cartel investigations, most notably in the car carrier segment, have resulted in significant fines in recent years.

Small and medium-sized European forwarders are exasperated with the methods employed by the carriers, with some claiming that their very livelihoods are at risk from what the forwarders claim are underhand tactics. One southern European forwarder wrote to the Loadstar: “All the shipping lines are charging an additional fee called lo-lo, in case you arrange the inland haulage directly with the trucking company instead of using their service.” The Loadstar has seen a document from MSC to a forwarder, effectively charging €31 ($35) to not provide a trucking service. The lo-lo charge is waived if line haulage is used.

Additionally, a north European forwarder told The Loadstar lines were “imposing carrier haulage”, forcing the company to use spot rates rather than offering contracts. It said: “It is an effective denial of service, in our case Maersk or Hamburg Süd both refuse to take our calls. But as I travel across Europe, I see forwarders being treated differently, never mind how big or small you are. Some small firms still get rates and allocations from Maersk in Turkey for instance…but no longer in France. Why? No idea.”

The southern forwarder said the carriers were apparently “exchanging information about exporters/importers, volumes, pol, pod, target price etc and, of course, this is not correct, as any shipping line should apply its own strategy instead of taking agreements between each other, controlling the market.” The forwarder also believes the vertical integration seen with some of the major lines is distorting the market.

Source: Loadstar, Splash 247