British forwarders hope end of liner conferences brings transparency

British forwarders hope end of liner conferences brings transparency The trade association for U.K. freight forwarders said Friday that the end of carrier conferences to and from Europe 'heralds a new era for shipping and trade liberalization.'
   The ban on carrier conferences went into effect from Saturday at midnight, making it unlawful for shipping lines to fix freight rates, any additional charges, or capacity on a collective basis.
   'The British International Freight Association has lobbied the EU Commission bilaterally and through its EU-level trade body, CLECAT, over a number of years, for a proper market in the provision of containerized liner shipping services between the EU and the rest of the world,' BIFA said in a statement.
   BIFA emphasized that 'lines will also have to be very careful about what information they exchange with one another or risk litigation with competition authorities which can, in certain circumstances, conceivably result in fines amounting to 10 percent of a company's global turnover, not to mention the legal recourse each customer may have. It is also believed that, apart from the above, this prohibition on 'price-fixing' between competitors extends to any other component that makes up the total price of the service, including surcharges, terminal handling charges and so on.
   BIFA Director General Peter Quantrill said deregulation of the airline industry may serve as an example for how the market may perform in a post-conference world.
   'No one can know for certain what the impact of the demise of liner conferences in the EU will be and many of our members are understandably skeptical about the potential benefits,' he said. 'However, if we look at what has happened in the airline industry since deregulation, one can reasonably expect some form of additional restructuring in the sector over the medium term and impetus to new business models and innovation.
   'The abolition of liner conferences in Europe may prove the catalyst for a wider shakeup in the international shipping industry, in respect of the deep sea movement of unitized cargo. It could lead to greater market transparency and possibly to more mergers and acquisitions, especially given the prospect of a new regulatory environment at a time when a record number of high capacity 'new build' vessels are coming up for delivery, against the backdrop of high fuel costs, the failure of the Doha round of world trade talks, global economic downturn and changing patterns of trade.
   'While we cannot expect an overnight transformation in the service level that carriers offer our sector, we might reasonably hope for gradual improvements in commercial transparency, such as on surcharges, better terms of business, improved customer service and communication, together with more accurate billing and documentation.'
   Meanwhile, European Shippers’ Council representatives and members were elated the day had finally come.
   Speaking at a shipper forum in Oslo organized by the ESC, the council’s chairman Dick van den Broek Humphreij said the conferences “will not be missed.”
   But ESC officials are under no false illusions that the end of the conferences will be a solution for slowing demand, which has caused freight rates and volume growth from Asia to Europe plummet this year.

van der Jagt

   “There will be no party held by us or our members, because there are some big challenges ahead for everyone, and not least because the ending of the liner shipping conferences has coincided with what looks to be the biggest economic crisis the world has faced for many decades,' cautioned ESC Secretary General Nicolette van der Jagt. “We understand the concerns of the liner shipping industry when they say they are worried that new market threshold limits on consortia and on agreements between consortia could threaten some existing and future slot swap, vessel sharing and similar agreements. Shippers like consortia and the flexibility and range of services they can offer; however, there has to be a trade off between this and competition. The proposals from the commission do not outlaw consortia, just their size and scope in order to prevent unfair distortion to the market. We do not wish to see competition reduced in the liner shipping markets.'
   Meanwhile, a shipper member of the ESC, Bjorn Vang Jensen, vice president of global freight and logistics services for Electrolux, said he was not looking for any further increases in the range of services from the lines, but wanted instead to see more operational collaboration between his company and the lines he used.
   Van den Broek Humphreij said the change would ultimately bring transparency.
   “We must encourage transparency of charges so people know what they are paying for, and re-establish the link between what you pay and the service you get,” he said. ' Eric Johnson