Ten trade organisations have urged the European Commission to launch an “immediate review” into competition regulations governing container shipping.
Such a move would enable new measures and mechanisms to be adopted before current legislation monitoring container carriers expires in under two years’ time, the lobby argues.
Under existing European legislation, container carriers are allowed to operate in consortia without infringing competition rules through to April 2024.
The legislation, known as Consortia Block Exemption Regulation, allows lines with a combined market share of less than 30% to cooperate or provide joint services on European trades.
But shippers argue that the exceptional markets of the past two years demand an urgent review of the legislation adopted before the pandemic in April 2020.
They argue that the ability of carriers to “collectively manage” the impact of the pandemic and make billions of dollars in profit “demonstrates that something is wrong”.
Eye to the US
The shippers’ lobby applauds the investigation conducted in the US by the Federal Maritime Commission (FMC), which facilitated the passage in June of the US Ocean Shipping Reform Act of 2022.
That went some way to addressing many of the grievances of users and services suppliers about the container shipping lines, shippers argue.
But the FMC has also agreed to allow shippers to adopt new, simplified procedures for shippers wishing to bring complaints against carriers for unfair charges.
Signatories of a letter sent to European Union Competition Commissioner Margrethe Vestager include the Global Shippers Forum, the European Shippers Council and forwarders lobby group Clecat.
The shippers argue that current EU regulation exempts container shipping lines from many of the checks and balances of competition law.
Carriers are able to exchange commercially sensitive information to manage the number and size of ships deployed, as well as the frequency and timing of sailings on trade routes around the world, the shippers argue.
They add that the benefits of the exemption from competition law are not shared by liner operators with the wider economy.
The ability of the container shipping industry “to generate profits totalling over $186bn in 2021, at the expense of the rest of the supply chain, and ultimately Europe’s consumers, demonstrates that something is wrong”, the shippers claim.
So the proposed review should consider “new measures and mechanisms, and should allow sufficient time for these to be considered and implemented before the expiry of the current regulation in April 2024”, the lobby concludes.