Ten organisations representing European shippers, freight forwarders, terminal operators and firms in the supply chain have demanded that the European Union immediately review its competition regulation for the container shipping industry.
This is the third time the organisations have called for a review of the regulations, citing continued increases in freight rates, and reductions in capacity, reliability, and quality of service.
The Maritime Executive reported that the organisations were now “disappointed” in the EU’s lack of action - after they twice called for a review in 2021 - compared to other regulators, including the United States. The Global Shipper Forum is leading the call for the review as one of the ten signatories to the letter.
“There is a striking contrast between the approach of the Commission and the vigour with which the Federal Maritime Commission in the US, and a number of other competition authorities globally, have pursued action against the lines, and the revelations of anticompetitive behaviour which emerged from their investigations,” the group wrote in a letter addressed to Margrethe Vestager, European Commission executive vice-president and Commissioner for Competition.
The group highlighted the latest data recently released by The International Transport Forum, which outlines the seven-fold increase in the freight rate and the reduction of capacity in Europe. They said carriers had increased their profit margins by up to 50%, resulting in a net profit of $186 billion last year, while service issues and costs for shippers had increased.
The EU’s Consortia Block Exemption Regulation, which exempts carriers from certain provisions of the restrictions to promote competition, will expire in less than two years and the organisations now want a review to commence immediately.
The organisations have claimed that “many of the excesses of behaviour” exhibited by shipping lines had stemmed from the “open-ended and highly favourable” terms in the current regulation.
“The regulation does not seem to be able to accommodate major changes in this market over the past few years, including developments in information standardisation and exchange, shipping lines’ acquisition of other supply chain functions, nor how the shipping lines have been able to leverage these to accrue supernormal profits at the expense of the rest of the supply chain.”
Among the ten groups endorsing the letter are the European Association for Forwarding; Transport, Logistics and Customs Services; Federation of European Private Port Companies and Terminals; European Shippers’ Council; Global Shippers’ Forum; International Federation of Freight Forwarders’ Associations; International Association of Movers; International Union for Road-Rail Combined Transport; FIDI Global Alliance; European Barge Union, and European Tugowners’ Association.
