ESC CRITICIZES TACA’S RATE RISES, POLICY

   The European Shippers’ Council has criticized the rate increase plan announced last week by the Trans-Atlantic Conference Agreement and urged its carrier members to dissociate themselves from the program.
Shippers have repeatedly advised their suppliers that "opportunistic price rises" of the magnitude proposed in the 2000 business plan of TACA cause instability and uncertainty in the market and are "commercially unacceptable," the ESC said.
    TACA’s announced rate rises, effective Jan. 1, are in the region of 50 to 75 percent for some commodities, according to the shipper council. The increases are unprecedented and substantial, it added.
    The increases will apply to cargoes moving under tariff and conference-wide service contracts, but they would also become a "benchmark for individual and confidential contract negotiations," the European shipper group said.
    "Shippers had hoped that the partial deregulation ushered in by the Ocean Shipping Reform Act, as well as the legal certainty provided by the recent decisions adopted by the European Commission, would lead to more sensible market arrangements," the ESC said.
    The European Commission’s competition directorate is still examining the maritime aspects of the "TACA 2" agreement, which is pending approval in Europe.
    TACA carriers are Atlantic Container Line, Hapag-Lloyd, Mediterranean Shipping Co., Maersk Line, NYK, OOCL, P&O Nedlloyd and Sea-Land Service.