Press Release
ESC urges Commission to repeal liner shipping block exemption without delay
28 September 2004
The European Shippers’ Council has published a new paper in which it outlines the case for a a successful review of the liner shipping block exemption regulation. The ESC urges the European Commission to repeal without delay the regulation which has enabled shipping lines to collectively fix container shipping rates, set shipping capacity levels and agree levels of surcharges, following its conclusion that the conditions for a block exemption are no longer fulfilled. ESC now proposes a truly competitive and business focussed way of bringing the industry into the twenty first century.
Nicolette van der Jagt, Secretary General of the ESC said, ‘The largest ever Shippers' Tri-partite Meeting which took place earlier this month in Shanghai, China, encompassing the key shippers' organisations representing industry in North America, Asia and Europe have unequivocally made clear their desire for reform of the liner conference system". Ms van der Jagt added "Regulation 4056/86 which in so many ways has held back shipping lines and business developments of their customers has been opposed by shippers since it was adopted. It is totally unacceptable to industry that the present antiquated system which permits and supports price fixing is allowed to remain in place at the expense of a more modern and suitable international regulatory system which would promote competition, greater economic efficiency and responsiveness to the needs of its customers. ".
The European Liner Affairs Association (ELAA), representing global liner operators itself has proposed to terminate price fixing and coordination of pricing which distort the operation of normal competitive liner shipping market. This has been very much welcomed as a step in the right direction. ESC believes that the proposals warrant further examination, but shippers would want to be ensured that anti-competitive practices can not be continued. ESC wonders for example why shipping lines still want to make collective decisions about surcharges and other ancillary charges when these should be representative of the operational costs they each individually incur? The question also arises why shipping lines cannot use publicly available market information to determine the level of shipping capacity required to meet seasonal demand and industry trends? The lines have an issue with the ability to ensure a common interpretation across the trades to prevent large-scale over or under supply of capacity. ESC believes collective interpretation of analyses within consortia (governed by the Consortia Regulation) or within shipping line alliances ought to be sufficient to address this issue. Therefore the ESC suggests that the Commission should press on with the repeal of Regulation 4056 and address the other issues within its review of the Consortia Regulations. This will allow industry and the liner shipping sector to re-focus on the many very real and immediate operational issues affecting performance, efficiency and costs of moving freight.’
For more information please contact:
Nicolette van der Jagt - Secretary General - tel: + 32 2 230 21 13
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