ELAA sure of database’s legality, benefit despite ACL resignation

ELAA sure of database’s legality, benefit despite ACL resignation The European Liner Affairs Association remains confident its trade statistics database, due to start when ocean conferences are banned from European trades in October, is compliant with new competition rules and will benefit both shippers and carriers, despite one of its members, Atlantic Container Line, resigning from the organization.
   The Brussels-based ocean carrier lobby group at the end of last year awarded a contract to run the information exchange system to Irish software firm P3 Technology, which has done work in the past for the Far Eastern Freight Conference. Tests of the program are due to start at the end of this month for the Europe/Australasia and Europe/East Coast South America trades, where there are no historical statistics.

Bourne

   Chris Bourne, executive director of the ELAA, explained to Shippers’ NewsWire that lines will essentially deposit monthly TEU figures for about 20 European trades, either on a port-to-port or country-to-country basis, into a “black box” that will be managed by P3. Relay cargo will be ignored. He added the ELAA would only intervene to make sure all the lines submit information and to check for consistency.
   The ELAA will then post headline trade figures free of charge along with other information it believes shippers will find useful such as the price of bunker, and the costs of going through the Panama and Suez canals.
   “We're trying to set a level playing field so there is shared knowledge,” Bourne said.
   “No one likes pay an extra charge, but when you start explaining how much bunker has doubled and then trebled, any sensible customer would understand that the lines have to recover it or go bankrupt. And that wouldn't suit anyone.”
   Other more detailed information such as a price index, demand forecasting and supply forecasting (based on information already in the public domain) will be made available at a “reasonable price.”
   Minutes will also be distributed from the trade association meetings, where lines will only be permitted to discuss publicly available market information and will have lawyers in tow.
   Bourne said the increased transparency is all part of the European Commission’s drive to clear the notion of smoke-filled rooms. “With the level of information we are going to make available, it's a different world. It's open book,” he said.
      The former MOL and Sea-Land executive pointed out that ELAA’s database would provide far more comprehensive data than is available. Where the FEFC’s figures only catered for about 70 percent of the trade, the ELAA numbers will be closer to 100 percent, he said.
   “We've been working on this for two years so of course I get a bit nervous, but pretty much everyone is saying they'll do it. If you look at the expense of them getting some phenomenal market information then I will be surprised if they won't.”

Abbott

   One carrier who won’t be submitting its figures will be New Jersey-based transatlantic operator Atlantic Container Line, owned by the Grimaldi Group in Italy. ACL Chief Executive Andrew Abbott explained that his company, as a small, single-trade carrier in a route with a plentiful supply of publicly available trade statistics, saw limited value in the ELAA’s product.
   “Furthermore, carrier organizations are inherently riskier now under the new legal framework, and we do not see the benefits of ELAA membership outweighing those risks,” Abbott SAID. “Were we a larger, multi-trade operator, we might have viewed ELAA differently.”
   ACL will remain “an active member of the World Shipping Council, which we find of great value in addressing a range of regulatory and legislative issues.”
   Bourne said ACL needn’t have worried about any legal risks, as the organization has meticulously gone over the draft guidelines the EC issued last September. The final version is to be published in July. “What we are doing is completely legal. We are not taking any chances on this whatsoever.”
   The ELAA had lobbied for more clarity on the draft guidelines, but the carrier group is now completely satisfied it is fully compliant. “The way I look at the guidelines they are pretty clear,” Bourne said. “If there is doubt then we won't take the risk. We assume that there will be only minor changes, if any, to the draft guidelines and we will act accordingly.”
   Shipper groups such as the European Shippers’ Council have expressed fears that the information exchange is evidence of the liner industry clinging to its old practices, and have called on the EC to revise its guidelines and outlaw the ELAA’s proposal.
   However, Bourne said the feedback he has received from speaking directly to shippers has been positive. “While they don't always agree with the whole package, one after another they agree that lines have got to have volume statistics and should be able to project supply and demand with the amount of investments involved. When we tell them that the information will be in the public domain the opposition vanishes. It will be to the benefit of both sides.” ' Simon Heaney