Freight News, Sea

Shippers lambast EU inertia over soaring shipping costs

[ March 30, 2021   //   ]

The European Shippers’ Council says it is disappointed at the lack of action by the European Commission over unreliability and high cost of liner shipping services.

At a recent meeting of the Maritime Forum on 25 March, which included shippers and forwarders along with carriers, port operators, ship owners and Commission representatives, it complained that EU regulators had rejected stakeholder pleas for more investigation of the liner shipping market. This was in contrast to the US, China, and Korea which have stepped up in monitoring and have opened investigations into the current market situation.

ESC said that the market is regulated only by the Consortium Block Exemption Regulation (CBER) “which seems to give shipping lines a free pass on EU competition law, without any monitoring by regulators. Sooner or later, regulators will have to step in.”

ESC wants the European Commission to issue a guidance document  for “ethical collaboration” that would give more clarity and, in the longer term, further measures to deal with the CBER.

ESC added that while shipping line representatives described at the Forum how they did their utmost to correct a disruption initially brought by the large volatility of demand in 2020, they rejected all liability and said that their huge second half of 2020 profits, along with the still higher ones forecast for  2021, “were a deserved compensation for the very difficult previous five years: a claim that may be questioned as none of them but Hanjin failed and all heavily invested in big new vessels.”

ESC added: “In reality, shippers, ports authorities, terminal operators, and freight forwarders have had their efficiency gains on the maritime part of the supply chains nullified by a poor quality of service and higher costs.  The current situation makes it impossible to export goods because the prices are too high related to the profit margin.”