Shipper groups step up pressure to end carriers’ collusive rate setting
With the European Commission’s recent decision to end the liner carrier practice of jointly setting freight rates, shipper groups from around the world believe they now have increased leverage to abolish similar privileges allowed by national governments for liner carriers in other trades.
“The repeal in Europe will become a force and model for change elsewhere,” said the Global Shippers’ Forum (formerly the Tripartite Shippers’ Group), in a declaration released today at a press conference in Antwerp. “Competition policies for the liner-shipping sector around the world can be expected to align themselves with those followed in most other industrial and service sectors.
“It is the GSF’s objective that these policies embrace competition, free market principles and end collusion among suppliers,” the declaration said.
The declaration was signed by the heads of the Asian Shippers’ Council, Canadian Industrial Transportation Association, European Shippers’ Council, Japan Shippers’ Council, and the National Industrial Transportation League.
The groups also want similar action taken to eliminate what they view as collective setting of surcharges by the liner carriers.
Surcharges are generally viewed by shippers as “making more money without any explanation or further justification,” said Dick van den Broek Humprheij, general managing director of the Dutch Shippers’ Council, and head of the European’ Shippers Council, to reporters. “We need to have transparency.”
John Ficker, president of the NIT League, said liner carriers simply need to do a better job at managing their internal costs before imposing surcharges. He noted that shippers must routinely do this within their own operations before raising consumer prices. “We want the same kind of activity and energy in the liner carrier industry,” Ficker said.
For ocean freight surcharges, “the formula should be set between the two parties (individual shippers and carriers),” Ficker said. The carriers “should not be allowed to sit around the table to determine what they are.”
The GSF believes shippers should be able to pursue “all-inclusive” freight costs with individual liner carriers to simplify their ocean transportation pricing.
Another area of concern for the GSF members is the ongoing imposition of supply chain security measures by national governments on both ocean and air freight transportation. The worry is that inconsistent security measures may bog down the international supply chain and offer a “backdoor” to terrorists. Governments “should not invent something and see the industry pay for it,” said van den Broek Humphreij, who chaired the GSF meeting. “That’s simply not going to work.”
The shippers’ declaration expressed concern about the direction of international cargo liability policies. “GSF is not yet satisfied that the rights and interests of shippers are properly protected under the proposals, the freedom to contract using volume contracts that can provide derogation from the instrument is not contested when it is between equal parties,” the declaration said.
GSF is also worried about the implementation of international measures to prevent the spread of pests in wood packaging, especially in the United States as it applies to dunnage, or smaller pieces of wood used for blocking and bracing containerized shipments.
“If the U.S. interpretation of the requirement for marking every piece of wooden dunnage is adhered to by the authorities, and if the strict rule is applied to return the whole container (including cargo and packing materials) in the case of any violation of the rule, it is likely to result in insufficient dunnage in the container and may lead to a serious accident,” the declaration said.