Global shipper group calls for elimination of antitrust immunity

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2008

Organizations representing shippers in North America, Europe and Asia have called for a further reduction in ability of ocean carriers to collectively discuss rates and services. The Global Shippers Forum, in a joint declaration after its annual meeting in Montreal, called for the end of carriers’ antitrust immunity in the United States, and urged the governments of China and India to apply their antitrust laws to liner shipping.
The GSF hailed the termination of antitrust authority for liner conferences in Europe, effective Oct. 18.
“GSF members strongly believe that European reforms repealing the liner block exemption as well as changes brought about in North America would provide comparable benefits for Asian countries, resulting in less influence by conferences and discussion agreements over rates and services,” it said.
The statement encouraged Asian governments to “introduce market-based principles as they apply to liner shipping.
“Competition . . . rather than collusion, will result in efficiencies and customized services for their customers that are not possible where prices are determined by liner carriers in government-sanctioned cartels,” the group stated in its declaration.
Noting that this year marks the 10th anniversary of the passage of the Ocean Shipping Reform Act, the shipper group encouraged the U.S. “to undertake a comprehensive review of its own shipping laws to determine whether an antitrust exemption should continue to exist for liner carriers. GSF believes that antitrust immunity as it relates to the ability of liner carriers to benchmark, discuss, set or fix rates, service terms and/or surcharges is not necessary and should be terminated.”
The forum is composed of the Asian Shippers’ Council, European Shippers’ Council, Japan Shippers’ Council, the Canadian Industrial Transportation Association and the U.S.-based National Industrial Transportation League.
The shipper group also expressed its opposition to scanning 100 percent of all containers bound for U.S. ports.
The GSF statement said surcharges should be temporary and should reflect only actual unexpected cost increases or decreases faced by suppliers. It expressed strong support for the inclusion of all surcharges and ancillaries in the total price paid for freight, to permit the proper recovery of all costs associated with the transport.
It said the application of surcharges and ancillary charges should be solely determined by an individual carrier. “Under no circumstances should carriers be able to apply surcharges or ancillaries as an organized group, i.e., through a discussion agreement, or conference,” it said.
The group also called for strong efforts to keep shippers up to date on the global investigation of price-fixing of air cargo rates and fuel surcharges, and the remedies available to shippers.
The GSF said both government and industry attention must be focused on maintaining critical and vital infrastructure necessary for supporting international supply chains.
Revenue from transport user charges and taxes should be directed to the transportation purpose for which they are collected, it said.
The group also called for “sustainable steps to protect the environment without compromising the efficiency of freight transport.”
Governments should develop and actively support programs that reward best practices, adopt technology or develop infrastructure that reduces the environmental impact of transport. “Punitive charges on transport users is not the proper method to protect the environment from the effects of freight transport,” the statement said.
The GSF called for a review of possible modifications to Incoterms, and a campaign to increase general awareness of the terms “to better define what charges fall to which parties’ responsibility under which terms of sale.” The statement said the goal of the review would be “to resolve conflicts and uncertainties between consignors, consignees, third parties and carriers.”
The International Chamber of Commerce, which sets and monitors Incoterms, officially known as International Commercial Terms, is already conducting an extensive review of Incoterms. Frank Reynolds, a trade consultant who represents the U.S. on the ICC committee, said input from the shipper groups would be welcome “if it’s a worldwide effort.”
“The door is already closed to national comments or we’d be doing this forever,” he said. The ICC committee hopes to cobble together a first draft at a meeting in Helsinki in May. At that point, it will be sent out to the 130 countries that participate in the International Chamber of Commerce.
Reynolds said the chamber is looking at 2011 as a realistic implementation date for the revised Incoterms.

Source: Shipping Digest