Printer Friendly

EU/US : COMMISSION URGES END TO SHIPPING CARTELS.

With the United States thinking of following the EU's lead by abolishing cartels in liner shipping, the European Commission made its pitch for such a move at a public hearing in Washington DC on 18 October. Testifying at the US Anti-trust Modernisation Commission, Fabrizia Benini from the Commission's Competition DG said the liner conferences' system kept prices high without ensuring a reliable service. Her views, along with other panellists representing liners, shippers, port authorities and inter-modal carriers, will help US legislators decide which path to take. The conference system, which allows shipping prices to be fixed and capacities regulated, has been enshrined in US law since 1916.

DOMINO EFFECT?

The Commission's testimony came hard on the heels of the EU's 25 September decision to repeal a 1986 Regulation (4056/EEC) that exempted liners from EU competition rules. The Commission hopes September's decision will have a domino effect on other anti-trust authorities, starting with the US (the EU was the first to scrap conferences). If the Americans do follow suit, the impact would probably be biggest on the trans-Pacific trade, given that the transatlantic market is already covered by the EU's new regime. The liner shipping industry is dominated by European-based liners like Maersk, Hapag Lloyd and Mediterranean Shipping. Most of the other big players are Asian-based.

IMMUNITY UNJUSTIFIED

There is "no evidence that the industry needs to be protected from competition by anti-trust immunity for price-fixing and rate discussions," Benini told the hearing. She argued that repealing the exemption would result in lower prices and greater reliability of service without having a negative impact on employment. She noted that 90% of the cargo shipped between the EU and US is already transported using individual contracts rather than the conference tariffs. Benini said the Commission would publish guidelines in 2008 (concluding a two-year transition period) on how to apply the new system. The EU executive is also consulting on whether an information-exchange mechanism between liners might need to be installed in place of the old system.

LINERS BACK STATUS QUO

The European Liner Affairs Association (ELAA), the mouthpiece for 21 of the world's largest liners representing 90% of total global cargo tonnage, said the Commission's testimony came as "no surprise". ELAA Director Chris Bourne told Europolitics that it should be up to each individual country to assess whether scrapping the conference system was appropriate. He added that the current US regime was "working well".

OTHER STAKEHOLDERS SPLIT

This view was echoed in the hearing by the Chairman of the US Federal Maritime Commission, Steven Blust, whose job it is to ensure that liners do not abuse the anti-trust immunity they enjoy. "Competition today is very intense" and relations between shippers [ie customers whose goods are being shipped] and carriers are "relatively harmonious," he claimed. Jean Goodwin from the American Association of Port Authorities (AAPA) also backed the exemption, claiming it promoted joint infrastructural projects. But other US stakeholders were keen to see change. Ed Greenberg, a lobbyist for carriers and shippers, called the exemption an anachronism, while Greg Stefflre, speaking on behalf of inter-modal carriers, said the exemption protected the liners while hurting motor carriers.
COPYRIGHT 2006 Europolitics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:European Commission
Publication:European Report
Geographic Code:1USA
Date:Oct 23, 2006
Words:524
Previous Article:TAXATION/ALCOHOL : COMMISSION TAKING CAUTIOUS LINE ON INCREASE IN DUTIES.
Next Article:EU/RUSSIA : DISCUSSIONS ON ENERGY HEAT UP WITH MOSCOW.
Topics:

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |