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EU pricing rules should be adopted worldwide says Global Shippers' Forum

Nov 15, 2016
New EU pricing rules for shippers that come into force in December should be adopted globally to increase price transparency and prevent uncompetitive behaviour, Global Shippers’ Forum (GSF) told a conference in Asia last month.

Alex Veitch, GSF’s Head of Policy, gave a presentation to the Global Liner Shipping Asia Conference in Singapore exploring competition issues in the maritime supply chain including megaships and alliances, the collapse of Hanjin and price signalling - the practice of announcing General Rate Increases.

The new legislation comes into force on 7 December following a three-year EU investigation. Fourteen shipping lines have agreed to significantly change their pricing behaviour but Alex Veitch said the legislation didn’t go far enough and should be adopted worldwide.

“If price signalling isn’t a significant issue then there should be no problem adopting these rules globally, thereby eliminating any possibility of co-ordinated price increases. Pricing practices need to be completely revised worldwide to bring shipping in line with other modern business practices,” he said.

Mr Veitch also said the growth of alliances was of concern as it had led to greater market concentration, with the top five liner companies accounting for almost 60% market share.

“GSF accepts that there are arguments in favour of vessel sharing agreements in terms of efficiency, but it’s important to ensure that it is not at the expense of choice and diversity of service. The trend towards larger vessels has also had an impact through increased port costs due to the necessary infrastructure investment and the need to load and unload a large number of containers quickly,” said Mr Veitch.

A new GSF policy paper due to be launched in November will give detailed analysis of the container shipping industry and explore pressures resulting from the 2008 financial crisis.

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Photo: Alex Veitch

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