FTA grapples with competition issues at European Maritime Law Association’s conference

Friday 22 October 2010

The Freight Transport Association (FTA) today set out the challenges facing shippers and carriers in the context of the modern regulatory landscape at the European Maritime Law Association annual conference.

Chris Welsh, FTA’s Global & European Policy General Manager, was on the panel which included US FMC Chairman, Mr Richard Lidinsky and representatives from various leading law firms. He said:

“It has been two years since we banned conferences and price fixing in Europe, so it is timely to assess how the the maritime transport industry continue has tackled with issues such as excess capacity, fleet modernisation and seasonal fluctuations, issues made more acute during severe economic crisis.

“Regulators, including the European Commission, the FMC and the US Congress, have put the spotlight on the maritime transport sector and it is in this context of intense scrutiny that the maritime industry now operates; it is crucial that all parties are aware of the legal framework in which they operate.”

The benefits of tighter regulation have certainly been felt by shippers, and ultimately consumers, in Europe where it has afforded them greater protection from the knock-on impacts of the worst global recession since the 1930s. However, Welsh acknowledged that there is still a lot of work to do before European shippers can benefit in full from the relatively recent adoption of a much tighter legal framework"

Welsh continued:

“In other corners of the globe where competition law is not enforced, overcapacity has not yielded lower prices. Instead, due to the price fixing made possible by liner conferences, the US and Asia have bore witness to cynical rate rises.

“While these effects are more muted in Europe, we have seen rates increased in lock step fashion and with common strategies in response to the crisis, despite the hard fought exemptions we secured two years ago. Shippers are rightly questioning precisely how capacity is being managed and the EMLA conference is the perfect forum with which to address the issue.

Welsh welcomed recent comments made by Eivind Kolding, Chief Executive of Maersk, calling for clearer contracts between carriers and shippers and his views that carriers would not be overly worried about the removal of anti-trust immunity in the US.

Welsh concluded:

“Shippers want to build long term partnerships with carriers and the best environment for that to happen is one free from cartel influence and one where customers and supplies can jointly develop their market strategies in a normal contractual framework.”

ENDS

Notes for editors

Last month FTA heralded the introduction of European-style, anti-trust legislation designed to eliminate cartel activity, including price-fixing, liner conferences and discussion agreements in US liner shipping markets.

The Bill, which was tabled by Congressmen Oberstar and Cummings on 23 September, marks a significant step in a process that the US National Industrial Transportation League (NITL) and FTA initiated in 1992.

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