Press release

The European Shippers’ Council is frustrated but not surprised by the results of the vote in Plenary today on the report of the Greek Rapporteur Ms Rodi Kratsa on plans from the European Commission to come forward with a regulatory proposal to repeal the competition block exemption for liner shipping conferences.

The report gives a number of confusing and contradictory messages in that it seems to be advocating some half-way house where the conference system should continue to exist to protect small and medium sized deep-sea liner shipping companies, without price fixing but with some sort of reference price or rate index, in accordance with European Court of Justice case law. The report also suggests that there would be no advantage to changing the current conference system.

Nicolette van der Jagt, Secretary General of the ESC, said shortly after the vote, ”The Parliament in effect calls upon the Commission to regulate prices in liner shipping. We do not believe that it is their task to do so, it is for the market to determine.”

”All the positive signs that there may be some prospect to engage in a constructive dialogue with the liner shipping carriers will be jeopardized if the legal framewrok as suggested by the European Parliament would become reality. Shippers would find this unacceptable This would be a retrograde step and will harms the signs of optimism that have been promoted.”

“The major preoccupation of the Transport Committee’s own-initiative report has been to ”preserve and promote the expansion of a viable and competitive European shipping sector.” The Parliament seems to have forgotten the aim of the Lisbon Strategy or else forgotten what it is essentially seeking to achieve. The purpose of reviewing the liner shipping regulation is to help European industry as customers of the shipping lines to remain competitive by keeping down the cost and improving the service levels of liner shipping, and thereby ensuring the consumer benefits through lower prices.”

“The Rapporteur has suggested that the Global Insight study does not provide a solid basis for repeal. Given that both sides of industry have stated that the work was serious, it is surprising to see an amendment adopted pointing to supposed shortcomings but without any detail.“

“Recent serious detailed inquiries into the liner conference by the Global Insight, the European Commission, the OECD and ICF have recommended that the liner shipping industry should no longer be granted an exemption for price fixing and freight rate discussions. Liner shipping industry has little to fear from the freeing up of the market place. The Global Insight Report says that the creation of a free market would produce substantial benefits to everybody in the industry. The report concludes that there is either a positive impact or no impact on the competitiveness of EU liner shipping firms and small liner shipping carriers will not experience particular problems. It is surprising that the European Parliament is completely ignoring the result of the study it has asked for itself in the first place.”

“We are however encouraged by the excellent speech given in the Plenary of the Parliament by Commissioner Charlie McCreevy who has said that the compatibility with the competition rules continues to be the benchmark for the review of 4056/86. Free competition is the name of the game in almost every industry in the world. Why not for liner shipping? The European Shippers’ Council looks to the European Commission and member states of the EU to now swiftly outlaw this outdated system as soon as possible.”

For further information contact: Nicolette van der Jagt, Secretary General of the ESC - Brussels 00 322 230 2113