Carriers allege European shippers’ lack of evidence in EC conference review

Carriers allege European shippers’ lack of evidence in EC conference review    Citing unsubstantiated criticisms of liner conferences by shipper organizations, the European Liner Affairs Association, the new Brussels-based carrier lobby, has written to the European Commission to defend its case for the retention of the conference antitrust immunity in Europe.
   In comments to the EC, the carrier group sought to undermine critical statements, previously filed by the European Shippers’ Council, that liner freight rates are chronically volatile, and that shippers faced capacity shortages in the transatlantic trade last year. The ESC cited the transatlantic example as evidence that conferences have failed to provide stability of vessel supply.
   The European Liner Affairs Association said that the ESC did not provide “any supporting data” on freight rate volatility, and did not furnish “concrete supporting evidence” about the lack of ship capacity in the Atlantic trade.
   By contrast, the association said that it provided data showing that tariff rates of several conferences have been stable in recent years.
   The carrier association complained that almost none of the industry comments submitted to the EC as part of the review of the regulation contains any quality data to support analysis. “Instead, most submissions rely on speculative and unsubstantiated assertions about rate instability and inadequate services,” the European Liner Affairs Association said.
   When the EC launched the review of Regulation 4056/86 in April, it said that it wanted the industry to provide facts to make a reasoned case for a potential reform of the law. A 2002 report by the Organization for Economic Cooperation and Development, strongly critical of liner conferences, had also found that it was difficult to gather good factual evidence on this topic.
   In June, Mario Monti, competition commissioner at the European Commission, asked conference shipping lines to justify the continuation of their antitrust exemption, saying that the burden of proof “lies firmly on those wishing to benefit from exemption to show that it is still justified.”
   But the European Liner Affairs Association told the EC in its latest comment that “there is no justification for such a reversal of proof.” Instead, all sides bear a burden of proof, it argued.
   “There remain important differences between carriers and shippers, with carriers supporting the maintenance of Regulation 4056/86 and shippers demanding the opposite,” the carrier association said. It added, though, that “not all users” of liner shipping services share the critical views of the European Shippers’ Council.
   The European Liner Affairs Association cited the example of the Confederation of Shippers of Belgium which, it says, is an organization that sees value in the conference system.
   Contrary to the ESC’s comment, the European Liner Affairs Association asked the EC not to rule out the possibility of granting an antitrust immunity to discussion agreements as an alternative to conference agreements.
   The carrier group also recommended procedures for the next stages of the commission’s review of Regulation 4056/86 and its conference antitrust immunity. It said that the EC should organize oral hearings, start a “wide ranging fact-finding exercise,” consult the competition authorities of countries like Australia, Canada, Japan and the United States, and submit drat proposals to an advisory committee.
   Australia, Canada, Japan and the United States have all decided to retain the antitrust immunity of conferences in recent years.