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Global Shippers' Forum looks for balance in liner alliance rules

Global Shippers' Forum looks for balance in liner alliance rules

Singapore: The Global Shippers' Forum (GSF) is advocating a balance between efficiency and competition in liner shipping rules on alliances in light of the impending meeting of APEC's Maritime Experts Group at TPT/WG-32 in Singapore, July 2009. At the meeting, the group will consider aNovember 2008 study produced by the consultants Meyrick and Associates for the Asia Pacific Economic Cooperation economies into non-ratemaking liner shipping agreements.

The GSF states that wile it agrees that many shippers and their representative groups are concerned that some alliances may be getting too big, there is equal recognition that the lines need to find greater economies and efficiency gains.

The forum believes that non-rate making shipping agreements must strike the right balance between competition and efficiency and cost savings." While the shipper organisation recognises the current financial problems of the lines in this current recession, governments cannot ignore the longer term picture or the principles of competition policy. The GSF believes in promoting efficiencies and customised services for their customers. Working together GSF believes that shippers and carriers can achieve competitive and efficient relationships.

Nicolette van der Jagt, Secretary General of the European Shippers' Council, supported the GSF recommendations saying that, "while consortia agreements, alliances, and other non-rate making agreements can promote carrier efficiencies, the end result must not hinder the economies of the marketplace." The bottom line she said is to, "delicately balance the operational efficiencies of the ship owners by permitting them to work directly with their customers."

John Lu, Chairman, Asian Shippers' Council, added "such support for non-rate making agreements should be conditioned on governments being able to examine these agreements and that they serve to promote efficiency as well as competition in the marketplace."

Peter Gatti, Executive Vice President of The National Industrial Transportation League representing U.S. shippers, said "In the current economic climate it is all too clear to users just how important it is that the shipping lines are able to cut costs just to stay in business. Non-ratemaking agreements such as alliances, vessel sharing, vessel space charters and vessel space swaps can be excellent tools for sharing costs and extending the range of services they can offer to shippers."

Robert Ballantyne, President, Canadian Industrial Transportation Association, remarked that many of his members, shippers from Canada, need to be certain about the degree of transparency in the carrier agreements. For example "A number of shippers and shippers' councils involved in the study - including Japanese and Korean shippers - had expressed concern about the concentration of major shipping lines in alliances or as a consequence of mergers and acquisitions, and their governments should be able to examine them and make a determination as to how they could impact competition," he said.
GSF members endorse the use of non-rate making liner shipping agreements which do not significantly reduce, limit, or remove competition from any indentified trade or group of trade lanes. In this regard GSF notes that shippers may not realise the full potential benefits of any efficiencies and cost savings afforded by non-rate making agreements where they operate in tandem with liner conferences or discussion agreements as competition will most likely be blunted or reduced.

The study, Liner Shipping Competition Policy: Non-Ratemaking Agreements Study has been produced for APEC to consider how to harmonise the member economies' regulations in this area of shipping. The comments expressed by shippers and reported by this study conducted for APEC by the Australian consultants Meyrick and Associates, will strengthen the call for closer regulation of liner shipping agreements. The non-rate making agreement study and the current European Commission review of the consortia regulation will be reviewed by GSF members at its up-coming meeting in London on 14-16 September.  [24/07/09]