Global Shippers’ Forum calls for more regulatory reform of liner shipping

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10 September 2010

Following the annual meeting of the Global Shippers' Forum (GSF) earlier this week in Macau, ESC Secretary General, Nicolette van der Jagt strongly backed the GSF call for regulatory reform of the liner shipping industry in Asia.

The GSF members sought the outlawing of rate-making cartels and urged governments in Asia to initiate reforms which were in line with competitive global practices such as those which now existed in Europe.

Ms van der Jagt also commented on the GSF's views of regulatory reforms elsewhere, in particular, she said, "We eagerly await the tabling of Congressman Oberstar's Bill to the US Congress. This would achieve an impressive level of international harmonization of competition policy regimes, and would provide a timely financial stimulus to world trade as carriers would no longer be able to disrupt the passage of US exports, and the trade of other global economies trading with the US, through artificial capacity and price management strategies."

Ocean shipping reform remains a key policy priority for the GSF. The GSF meeting had noted that "the past year had witnessed a variety of unacceptable shipping practices, ranging from the imposition of abrupt and opportunistic rate increases and surcharges, cargo 'roll-overs', the limitation of shipping capacity and a general lack of adherence to rate agreements and contractual arrangements on an unprecedented global scale. This has resulted in major disruption to global supply chains, often resulting in delayed deliveries especially for time sensitive shipments. These practices have acted as a barrier to the development of international trade at a time when fostering global commerce is vital to economic recovery and supporting employment in response to the worst financial and economic crisis since the 1930's."

It is against this backdrop that the GSF convened a seminar during its Annual Meeting in Macau involving regulators from Europe and North America. The aim was to review recent changes to competition law in Europe and their impact, and possible regulatory changes in the US as a consequence of the disruption to the normal flow of international commerce resulting from carrier actions in response to the financial crisis.

The GSF recognized that while there had been major changes in Europe to bring the shipping industry into line with the normal provisions of anti-trust laws, and while similar progress in North America to regulate the activities of carrier agreements had been made, with further measures imminently to follow, there had not been any corresponding progress in Asia.

The main goal of the GSF's seminar in Macau was therefore to kick start a policy debate in Asia to draw attention to the unfavourable position of Asian shippers who are afforded little or no protection by the application of anti-trust laws. The Forum also hoped to inaugurate an Asian maritime regulatory reform campaign to bring Asia into line with Europe and North America.

In a related issue, the GSF focussed on the increasingly common practice by carriers in the main east-west deep-sea liner trades of slow steaming. The GSF expressed the view held by shippers around the world affected by slow steaming, that resultant cost savings should be reflected in freight rates, and that schedule reliability assured, which is not presently the case. The GSF stated that slow steaming should not be used as a means of restricting or managing capacity to influence the functioning of a normal competitive market.

Nicolette van der Jag confirmed that this remains a key concern for European shippers who believe that carriers introducing slow-steaming to reduce their own costs must understand the possible impacts this has on their customers' supply chains: lengthening lead-times, increasing inventory cost, disorganizing transhipment patterns, and making changes to schedules and port rotations with little or no warning. "Carriers should pay more attention to their customers needs and take the time to learn about their customers' businesses".

Other issues

The GSF also re-emphasized its determination to support and advance previous policies and campaigns in a number of other key areas, namely: air cargo policy, e-freight, economically and environmentally sustainable freight transport services; and a proportionate, risk-based, common approach to supply chain and freight transport security.

Finally, the GSF supported the International Labour Organization's review into guidance in regard to the safe loading of containers. The GSF believes that existing best practice approaches and enhanced communication of such practices are the most appropriate way of improving safety standards rather than any new regulatory measures. The GSF looks forward to working constructively with the ILO, shipowners, ports, trade unions and other supply chain actors in this and on other matters in the future.

Notes to the editor:

The GSF comprises shippers' organisations from Asia (including the Indian Sub-Continent and Oceania), Africa, Europe and North America.

For more information about the GSF please contact:

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

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