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BIFA calls for government to investigate container shipping market

Nick BradleyBy Nick Bradley5th January 20223 Mins Read
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The British International Freight Association (BIFA) has written to the UK government to urge it to look into the state of competition within the current deep-sea container shipping market.

The UK’s main trade association for freight forwarding and logistics companies says its members are concerned that certain practices undertaken by the principal container shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade.

In a letter to Robert Courts MP, Parliamentary Under Secretary of State at the Department for Transport, BIFA’s Director General Robert Keen expresses the trade association’s concern that during a period of well-documented chaos within the container shipping sector, commercial power is becoming increasingly concentrated, resulting in diminished market choice and competition, and distorted market conditions.

“BIFA members fully accept that a free market economy is open to all, but are increasingly concerned that the activities of the container shipping lines, and the exemptions from legislation from which they benefit, are distorting the operations of that market to the shipping lines’ advantage, whilst adversely and unfairly affecting their customers, especially freight forwarders and SME businesses,” Keen wrote.

“The facts speak for themselves. During a period that has seen EU block exemption regulations carried forward into UK law, there has been huge market consolidation.

“In 2015, there were 27 major container shipping lines carrying global containerised trade, with the largest having a 15.3% market share. Today, there are 15 shipping lines, organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40%.

“The pandemic has highlighted and accelerated this development, which has also contributed to dreadful service levels, and hugely inflated rates, with carriers allocating vessels to the most profitable routes with little regard to the needs of their customers.

“Drewry recently issued a profit forecast of more than US$150 billion for 2021 for the main container shipping lines for which financial results are available.

“To put that into perspective, this is more than has been achieved in the previous 20 years combined, and many BIFA members consider it to be a case of blatant profiteering.”

BIFA is joining a growing number of organisations, including CLECAT and FIATA, the US Federal Maritime Commission, and the Australian Productivity Commission, in calling for governments at a national and pan-national level to give careful consideration to the evolving business arrangements in the container shipping market to see whether they are in breach of competition law.

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Nick Bradley

Nick was appointed Editor of Logistics Manager in April 2021, roughly 22 years after cutting his teeth in journalism working within the Handling Division of DMG World Media opposite former LM editor Malory Davies. He subsequently spent 15 years as Editor and Editor-in-Chief of numerous B2B titles covering industrial vehicle design and engineering, intelligent transportation systems and even launched technology publications focusing on ADAS, autonomous vehicles and winter resort operations. After a five-year spell running a Top 100 Amazon third-party seller company, he has found his way back to his first love, publishing, via an events company specialised in sustainability-themed conferences where he tried to rid the world of plastic pollution and electronic waste.

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