ELAA’s sunset

ELAAÆs sunset Liner carrier group served its purpose, and then some, says executive director.

By Chris Gillis

   When container carriers established the European Liner Affairs Association in 2003, its purpose was clear, as well as temporary ' persuade the European Commission of the value for maintaining the ocean carrier conference system.
      The ELAA ultimately failed in its lobbying efforts to preserve the ability for carrier conferences in the European trades to set common freight rates and cooperate on capacity, but its existence helped smooth the transition for the industry's carriers engaged in the world's first completely deregulated liner trade.

Bourne

      'When you negotiate, it's always the case that you'll never get everything you want,' said Chris Bourne, the ELAA's executive director, in a recent interview in Brussels. 'I think we served our purpose well. I feel satisfied.'
      The ELAA board in mid-March agreed that the organization fulfilled its objective and has decided to close the office later this year.
      Bourne, the former MOL and Sea-Land Service executive who led the ELAA for the past five years ' often under heavy criticism from shippers ' believes the liner industry is better understood in Europe's capital of Brussels.
   'The industry's relationship with Europe's competition authority has been hugely improved,' Bourne said. 'They understand our industry when before they saw us with our conferences as bad news.'
      And while shippers, led by the European Shippers' Council, came out on top in this highly charged debate about liner carrier conferences, it wasn't a complete loss for the liner carriers.
   Since October 2008, the ELAA has developed an EC-approved trade statistics database which allows lines to deposit monthly TEU figures for the seven European trades, either on a port-to-port or country-to-country basis, into a 'black box.' The association posts the headline aggregated trade figures free of charge on its Web site and is happy to e-mail this data to anyone in the industry who wants it on a monthly basis. Other more detailed volume information is available at a 'reasonable price.'
      The database is managed by ELAA subsidiary Container Trades Statistics (CTS), a 10-person team based in the United Kingdom and Singapore, and covers all the European liner trades.
      'This is the first time the liner industry has had an accurate database, and you can't do business today without proper data,' he said.
      The ELAA was also generally pleased with the outcome of the EC's review of Regulation 823/2000, which grants a block exemption for liner shipping consortia, and the EC's Maritime Transport Guidelines published in September 2008. 'DG Competition in this case definitely listened to what we had to say,' Bourne said.
      Europe became the first major region to completely eliminate liner carriers' immunity. Reviews of carriers' pricing immunity by lawmakers in Australia, Canada and Japan have led to retention of the immunity, or as in the case of the U.S. 1998 Ocean Shipping Reform Act, a narrowing of the practice.
      It's difficult for industry and government analysts to determine whether shippers in the European trades are better off without the conference system. The shipping industry experienced one of the worst global economic recessions in its history at the time the EC's conference ban took effect.
      Bourne believes the shipping industry would have suffered with or without conferences. However, the industry may have experienced a less dramatic freefall with the conference system in place. Carriers may have pulled capacity from the trades more quickly than would have been experienced under conferences, which traditionally made these types of changes in a slower, more methodical manner, he said.
      The ELAA's membership comprises APL, ANL, CCNI, China Shipping, CMA CGM, COSCO, CSAV, Evergreen, Hamburg S'd, Hanjin, Hapag-Lloyd, Hyundai, Independent Container Line, Maersk, MISC, OOCL, Safmarine, SCI, Turkon, United Arab Shipping Co., Yang Ming and Zim. The three Japanese lines ' MOL, NYK and 'K' Line ' left the group during the past 18 months, citing costs and concerns over breach of competition rules.
      Once the ELAA closes its doors, liner carrier lobbying functions are expected to be carried out in Brussels by the World Shipping Council, which already has an office there. The council is the liner industry's leading advocate on legislative and regulatory affairs in Washington and worldwide.
      CTS will likely remain a separate company. 'We expect CTS to continue to manage the database started by the ELAA and extend its coverage globally,' Bourne said.