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ESC joins GSF to tackle consolidation in global container shipping

Jan 17, 2017
Representatives of exporters and importers from around the world have joined forces to advance and protect their members' interests in the face of unprecedented change in the global container shipping industry.

The European Shippers' Council (ESC) has joined the Global Shippers’ Forum (GSF) to promote the findings of new research and analysis commissioned by GSF into the impacts of new 'alliances' being formed by container shipping lines and the growing use of so-called mega-ships (those with more than 18,000 teu capacity).   

Shippers fear that the contraction of the shipping market into a very small number of tightly knit alliances, and the use of much larger vessels, will reduce their choice of carrier and the quality of the services delivered as carriers operating within such arrangements cannot compete amongst themselves with regard to the agreed capacity, sailing frequency, transit times, ports of call and service level.  

GSF's paper – The Implications of Mega-Ships and Alliances for Competition and Total Supply Chain Efficiency: An Economic Perspective - makes a series of recommendations to competition authorities and regulatory bodies around the world to mitigate the possible implications for competition in key liner trades arising from a reduced pool of competing carriers.  

It offers a range of options for national and regional competition authorities on how to approach the regulation and oversight of the new shipping alliances including:  

  • Competition authorities and regulators should ensure sufficient independent competition on key trade routes, given that the emergence of alliances has produced barriers for new entrants and has made it nearly impossible for independent lines to compete on some trades; 

  • Competition authorities should repeal existing exemptions from antitrust laws and implement effective monitoring of alliances, including direct intervention to preserve competition where appropriate; 

  • Competition authorities should liaise and align their practice and powers in that field.  

GSF Chairman Bob Ballantyne said: "I am delighted that ESC has joined GSF in order to promote and defend shippers' interests at global level. GSF has made the voice of shippers heard in the UN agencies responsible for the regulation of the maritime sector and supported many of its member associations in advancing more transparent regulation of the container shipping industry in their home markets."  

"ESC, with its network of contacts in the European institutions, will bring further pressure to bear in the key European liner markets. I very much look forward to working with Denis Choumert and ESC members in the future pursuit of our common goals of safe operations, open markets and environmentally responsible transport.”  

ESC Chairman Denis Choumert said: "ESC is pleased to be working with GSF on this critical issue of the necessary evolution of the structure and regulation of global container shipping. As a member of GSF, we will use our contacts and networks in Europe and elsewhere in the world to promote the report's findings and demonstrate the value that joint working can have in advancing shippers' interests more generally.”  

Both chairmen call for shippers to respond to these threats and opportunities in a co-ordinated way and hope that shippers’ associations around the world will be able to use the findings and the analysis of this paper in their representations to their own governments on behalf of their members. 

Photos: Top: The MSC Maya is the world’s largest container ship. Middle right: ESC chairman Bob Ballantyne.

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