Forwarding, Freight News, Logistics, Road, Sea

Forwarders welcome container haulage probe

[ July 14, 2022   //   ]

European forwarders’ group CLECAT says it welcomes International Transport Forum’s call for more regulatory attention on the door-to-door container market.

The ITF has published an independent report on the performance of maritime container supply chains, bringing together data it has collected over the last couple of years on the ocean carriers’ behaviour. CLECAT endorses the think tank’s urgent call for more attention regulatory attention on fair competition in door-to-door container transport.

The report recommends competition authorities to consider vertical integration in the carrier industry, and to make sure that there is fair competition in the markets where carriers have started to compete such as the land-side port and logistics markets.

Nicolette van der Jagt, Director General of CLECAT noted: “We are pleased that the ITF has fully recognised the challenges the ongoing vertical integration by the container shipping industry poses to competition regulation. This is especially the case if shipping companies can use their antitrust immunity and their leverage as carriers to acquire competitive advantages in markets where they compete with freight forwarders, port service providers or logistics operators that do not have antitrust immunity.

“The denial of forwarder access to contract rates by Maersk and Hamburg-Sud is only one of the examples of market abuse mentioned supported by vertically integrated door-to-door services. Not only do freight forwarders suffer from the discriminatory practices towards them; this is also the case for shippers and end-consumers due to the lack of service options.”

She added: “It is about time for the European Commission to urgently revise their competition framework to reflect the reality of the container shipping market and ensure they capture the full extent and effects of shipping line co-operation, as experienced by freight forwarders and other parties in the maritime logistics supply chain.

“The independent findings of the International Transport Forum confirm CLECAT’s view that the remedy does not lie in amending the current Consortia Block Exemption Regulation as this exemption is beyond repair and no longer fit for purpose. There will be a need to fundamentally reshape the rules and consider new legal instruments as competition authorities are no longer able to enforce open-ended regulations.”

CLECAT notes also that utilisation rates of only 70% are not consistent with an ‘explosion’ in demand for container transport.

It adds that the return of idled capacity to the market during the third quarter of 2020 appeared to lag the recovery in spot rates and did not proceed as fast as capacity withdrawal during the first and second quarters. Regulators should therefore reconsider competition arrangements for liner shipping by restraining possibilities for joint capacity management.

It adds that the top container shipping lines made an estimated USD 160 billion over 2021 which supported them in acquiring logistics companies and forwarders, raising competition issues, whilst investing a negligible share of their profits in decarbonising their activities.