TRIPARTITE SHIPPERS BACK LIABILITY AND ANTITRUST REFORMS

TRIPARTITE SHIPPERS BACK LIABILITY AND ANTITRUST REFORMS    Organizations representing shippers from Asia, Europe, and North America have backed proposals for reforms of the ocean cargo liability regime and the liner shipping antitrust immunity, during their annual Tripartite Shippers' Group meeting.
   The Canadian Shippers' Council, U.S. National Industrial Transportation League, European Shippers' Council, Japan Shippers' Council, Korean Shippers' Council, Philippines Shippers' Bureau, Hong Kong Shippers' Council, Thai National Shippers' Council and Federation of ASEAN Shippers' Councils discussed the issues last week at a meeting held in New Orleans, La.
   The Tripartite Shippers' Group believes that trade by sea would be facilitated by a uniform, international ocean cargo liability regime for loss or damage, updated to take “modern developments in transportation and logistics” into account. The shipper group said that “none of the current regimes” on cargo liability take full account of modern developments in international trade such as containerization, multimodal transport, just-in-time delivery and e-commerce.
   A working group of the United Nations Commission on International Trade Law is now considering a draft instrument on transport law, including provisions on ocean cargo liability. The Tripartite Shippers' Group said that it supports these efforts.
   A reformed regime should, according to the Tripartite Shippers' Group: apply to international ocean cargoes, including port-to-port and multimodal shipments; increase the liability limitation “to a level that realistically reflects the value of the lost or damaged shipment;” allow customized contracts between shippers and carriers to depart from cargo liability standards; end the “error of navigation” defense of shipowners; and minimize the burden on international trade resulting from excessive litigation.
   The Tripartite Shippers' Group also backed an agreement made between one of its members — the National Industrial Transportation League — and the World Shipping Council on a reformed cargo liability regime.
   On competition regulations in liner shipping, the Tripartite Shippers' Group reaffirmed its support for a free and competitive ocean liner transportation system “that recognizes that pricing should be individually determined by each carrier based on the competitive market and individual carrier's cost of operation, including a reasonable return on investment.”
   The shipper group agrees with the conclusions contained in the Organization for Economic Cooperation and Development's report entitled, “Liner Shipping Competition Policy.” The OECD report found that antitrust immunity in the area of joint pricing “does not serve a public purpose,” and that national governments should consider removing the privilege for liner conferences and discussion agreements, the shipper group said. Specifically, the shipper organizations supported the report's findings that it found no convincing evidence “that the practice of discussing and/or fixing rates and surcharges among competitive carriers offers more benefits than costs to shippers or consumers.”
   Commenting on a reform of the antitrust regulations in Europe, announced by the European Commission, the shipper group said that it urges the European Commission and national governments “to proceed as expeditiously as possible.”
   Terminal handling charges, other surcharges and ancillaries in liner shipping should be transparent and “should not be used as a means to achieve revenue increases,” the shipper group said. The group supports the OECD recommendation that “shippers and carriers should always have the option of freely negotiating rules, surcharges and other terms of carriage on an individual and confidential basis.”
   The Tripartite Shippers' Group said that it believes that “voluntary guidelines” developed by carrier discussion agreements should not be used to implement collective pricing and service strategies.
   The international shipper delegates also discussed the port and maritime security issue. They agreed that government and the freight transportation industry, including shippers, “must work together in fashioning procedures that will be efficient and effective in making the freight transportation system safe from terrorism unduly impeding commerce.”
   “A terrorist incident directed at the world's ocean transportation system would result in interrupted vessel service, port closures and delays to cargo,” the shippers organizations said in a joint statement.
   In the air cargo sector, the Tripartite Shippers' Group criticized the controversial Resolution 502 of the International Air Transportation Association. The proposal would reduce the volume to weight ratio per paid kilogram.
   The shipper delegates agreed to issue a joint letter transmitting these concerns to IATA and pledged that each council should communicate its opposition to Resolution 502 to individual carriers and, where appropriate, to its national government.