Allowing carrier discussions means greater rate spikes and more surcharges, claim lobby groups
Asian shipper associations have launched a stinging attack on shipping line conferences in their submissions to Singapore’s consultation on plans to extend block anti-trust exemption for carriers.
The Asian Shippers’ Council said shippers in Asia had endured greater rate spikes and worse service quality than anywhere else in the world, despite allowing shipping lines to discuss rates and surcharges.
The Singapore National Shippers’ Council’s submission to the Competition Commission of Singapore (CCS), said: “The block exemption allows liner shipping companies to organize, to fix rates and surcharges, and terms of conditions.
“Asia has more shipping conferences than anywhere else in the world, and Asian shippers have had to put up with more surcharges than anywhere else in the world. The correlation between the two – shipping conferences and surcharges – is hard to miss.
“Even when some of the charges or surcharges do not reference Singapore, Singapore-based companies are affected because of their extensive trading ties. The Global Shippers’ Forum told the CCS it was opposed to liner conferences and carrier discussion agreements that distorted normal market competition. It said this resulted in higher prices paid by shippers and higher-priced consumer goods than would be obtained by a normal, fair and competitive market in the provision of ocean shipping services.
“The GSF is, consequently, opposed to the Singapore Liner Conference Block Exemption Order and its proposed extension for a further five years,” its submission added.
The CCS has proposed the extension to the block exemption, granted by the Minster for Trade and Industry in 2006 under the Competition Act, which will expire at the end of the year. Concerned parties had until 4 October to formally express their opposition.
The CCS claims the presence of an extensive network of liner shipping companies has helped Singapore develop into a leading maritime and trading centre, and the extension would “contribute to promoting economic progress”.
Source: Damian Brett, IFW News, 08 October 2010