Global Shippers Forum seeks complete global ban on shipping conferences

A MAJOR row is brewing over the liner conference system that is still allowed to operate outside of the European Union amid lobbying by the Global Shippers Forum for a regulatory overhaul of the global container trades.

The demand has drawn dire warnings from Andy Allan, formerly a manager in P&O Containers/P&O Nedlloyd, that this action would lead to the market being monopolised by one or two of the major players, who would be able to set whatever rates they chose.


The GSF represents 40 shipper groups, including the National Industrial Transportation League, the Asian Shippers` Council, the Union of African Shippers` Councils, the Canadian Industrial Transportation, and the UK Freight Transport Association.


The GSF is calling on other countries to remove shipping lines` antitrust immunity from local competition law, with the focus firmly pointed at North America and Asia.


A report by London`s International Freighting Weekly said that in its annual report, the GSF states that reform is "being strongly resisted" by carrier interests, such as the International Chamber of Shipping and World Shipping Council.


"Their policy is to defend the conference system in those parts of the world where conferences are permitted," the GSF declared.


The coalition is urging the shipping industry to "move on and embrace a new pro-competition paradigm, where market efficiency, innovation and competitiveness are determined by free and fair competition in the provision of liner shipping services," the GSF said.


The report noted "fresh moves are now afoot in Washington to introduce a bill that would prohibit conferences and discussion agreements in the US. The Federal Maritime Commission is due to publish a study on the impact of the EU conference ban in early January".


In response to the call for the outright abolition of liner shipping conferences around the world, Andy Allan, formerly a manager in P&O Containers/P&O Nedlloyd, blogged on line: "If shipper councils want a market where each carrier fights to fill ships by cutting their prices, they will end up with only one or two dominant carriers. All others will have "thrown in the towel". That will mean minimal choice for shippers.


"Ultimately, those one or two carriers remaining will enjoy a monopoly and they will be able to charge whatever they want. Others will not return to the market as the cost to re-enter will be prohibitive and they will know that the remaining dominant players could kill any attempt by a returning/new carrier to enter/grow by dumping prices at any time they want," he warned.


"The outcome will be price volatility (real or aspirational) in the short-term and higher prices in the long-term," he said.


"Conferences allow for new carriers to come into the market, providing choice of services. They allow for long-term planning for both shippers and carriers, and they create the environment for low, long-term, interest rates for financing ships, terminals and infrastructure," Mr Allan added.