Saturday 22nd Oct 2016 - Logistics Manager

FTA challenges price fixing in liner shipping market

Failure to enforce competition law in some parts of the world has allowed price fixing to result in “cynical rate rises” in the liner shipping industry, according to the Freight Transport Association.

Speaking at the conference of the European Maritime Law Association, Chris Welsh, the FTA’s global and European policy general manager, said: “Regulators, including the European Commission, the FMC and the US Congress, have put the spotlight on the maritime transport sector and it is in this context of intense scrutiny that the maritime industry now operates; it is crucial that all parties are aware of the legal framework in which they operate.”

“In other corners of the globe where competition law is not enforced, overcapacity has not yielded lower prices. Instead, due to the price fixing made possible by liner conferences, the US and Asia have bore witness to cynical rate rises.

“While these effects are more muted in Europe, we have seen rates increased in lock step fashion and with common strategies in response to the crisis, despite the hard fought exemptions we secured two years ago. Shippers are rightly questioning precisely how capacity is being managed and the EMLA conference is the perfect forum with which to address the issue.

Welsh welcomed a call by Maersk chief Eivind Kolding for clearer contracts between carriers and shippers and his views that carriers would not be overly worried about the removal of anti-trust immunity in the US.

Welsh said: “Shippers want to build long term partnerships with carriers and the best environment for that to happen is one free from cartel influence and one where customers and supplies can jointly develop their market strategies in a normal contractual framework.”