Freight News

Shippers enraged by global shipping crisis

[ February 18, 2021   //   ]

The Global Shippers’ Alliance (GSA) says that it is “furious” at the chaotic state of the shipping market “and the lack of mechanisms to resolve it”.

“Production, marketing and distribution are all disrupted and economic costs are beyond measure,” said chairman Denis Choumert, chairman of GSA and the European Shippers’ Council.

Godfried Smit, secretary general of European Shippers’ Council, added: “Many major European ports are jammed, while container ships are waiting for a berth, inbound containers are sitting in the terminals to be cleared and shipping lines are refusing outbound bookings because they want to expedite return of the containers to the Far East”. He said that outbound freight rates have risen 5-6 times but “exporters may still not get a booking”.
Toto Dirgantoro, chairman of the Asian Shippers’ Alliance and the Indonesian National Shippers’ Council said: “Freight rates from the Far East to Europe have increased 10 to 15 times on some occasions and three to four times to North America, even for contract rates, and spot rates would be much higher. Shipping lines are accepting bookings based on profitability or long-term strategic importance, and, hence, small to medium sized shippers are sacrificed”.
GSA believes that resolution of the current situation might be well beyond competition authorities’ jurisdiction. The ESC met with the European Union DG Competition in January 2021. “Shipping lines need to release more core information about capacity planning, capacity changes, service changes, demand forecast, etc. to clear themselves out of collusion claims. Shippers have little access to this sort of information and should rely on relevant authorities to safeguard their interests. Shippers are never on the same playing field with liners,” Smit stated. 
GSA highlights the responsibility that carriers have in exchange of the protection they have from standard competition laws. “They should not abuse of these privileges as it seems to be the case today,” says GSA.
It added that it is worrisome that the European Commission recently allowed the renewal of the block exemption for liner shipping consortia without adding any tool or adjustment to check liners and better consider shippers’ interests, which could have been instrumental in preventing or mitigating some of the damage shippers are currently suffering.