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On 15 June, CLECAT participated in an online roundtable event hosted by MEPs Vera Tax (S&D, NL) and Jutta Paulus (Greens/EFA, DE) to debate the impact of mega-vessels on the maritime supply chain. This followed the grounding of the mega vessel ‘Ever Given’ in the Suez Canal at the end of March this year, which has led to long waiting times, further port congestion and delays.

Olaf Merk, ports and shipping administrator at the International Transport Forum, in a keynote introduction said the current regulatory framework was benefiting carriers at the expense of other actors in the supply chain. ‘The COVID crisis revealed a misalignment of capacity and incentives to solve the bottlenecks. Carriers have shown remarkable joint capacity management that was initially there to prevent losses but has now led to record profit. The entry into service of ever larger ships put pressure on ports that had to invest heavily through public funds in order to serve them’, he said, adding that minimum port charges could be applied to recoup these costs.  He considered some policy options to tackle these issues, such as regulating ships size, put an end to the special treatment of shipping in competition rules, reform State aid rules and taxation thanks to a global minimum corporation tax and introduce minimum port charges to make sure that public investment gets recovered. He also called for greater competition monitoring and a utility regulation model for container shipping.

Nicolette van der Jagt, Director General of CLECAT, noted that the situation is currently worsening, due to the closure of the port of Yantian, which could have very similar effects to the Suez blockage, if not worse. These issues are affecting the economic recovery with the lack of equipment and the collapse of service quality. She noted the incidents have clearly shown the weak points of the maritime supply chain. The corona-crisis was only the trigger for this. It has also demonstrated what can happen to prices and reliability if control remains in the hands of just a hand full of shipping lines. With this in mind, CLECAT believes that the European Commission should take its responsibility to act as a guardian of the Treaty. It should make competition rules again fit for purpose. With only 3 major alliances that operate mega vessels on the East-West trades the container market is simply not functioning well.

Lamia Kerdjoudj, Secretary General of FEPORT, regretted that decisions to build mega-vessels are made unilaterally by carriers, without consulting other stakeholders such as port terminals who need to make huge investments to receive these ships. Ms Kerdjoudj noted that the CBER has been renewed purely on a legal basis, without economic rationale justifying this exemption. She concluded by making a strong call on the European Parliament to have a look in the current disruptions faced by the actors of the maritime supply chain.

Magda Kopczynska, Director Maritime Transport in DG MOVE, recognised that the Commission is aware of the disturbances in the maritime and logistics supply chain. ‘It was the Suez Canal and Covid that disrupted the smooth functioning of the maritime supply chain’, she said.  ‘But I also believe that maritime transport has been the sector that has proved on so many occasions that it can rebound and will. The world was still in the midst of the pandemic, and shipping as a global industry would be affected by events elsewhere in the world. On the Commission side we are looking at the situation but I do not believe we should be jumping into a policy decision unravelling everything that has been working well.’

In response to these comments from DG MOVE, CLECAT wonders what the Commission thinks has been working well: limited choice, poor service quality, less direct port-to-port connections, less cost recovery in ports and now the huge rise in shipping freight costs? The question remains what will be the trigger for the Commission to start doing something?