Monday, 09 August 2010 13:47
Masakorala criticizes shipping lines for anti-competitive practices
August 8, 2010, 7:23 pm
With shipping lines charging congestion surcharges from consignees the Secretary General of the Asian Shippers’ Council, Sri Lankan Rohan Masakorala, says Asian government’s should adopt laws to tackle anti competitive practices as the US and European bloc have already done.
"It is interesting that the delays in port operations for various reasons are charged back to the consignees as congestion surcharges by liner companies. It is ironic that these lines tend to punish their customers, "the shippers", when their service arrangements are disrupted by ports where they come into terminal agreements and so on," Masakorala said as quoted by the International Freighting Weekly.
"Instead of trying to make a non-transparent quick buck from shippers, these lines should negotiate congestion rebates from ports of call to reduce ship-handling charges for each delayed voyage, rather than punishing shippers (their clients) if they have to anchor for a longer period due to strikes and labour issues.
"This is smply another way of generating extra revenue by passing the blame on ports. Amazingly, these same liners are now practicing a new term called "zero-rated freight" and have started to run their businesses on surcharges and other non-transparent charges, which are invariably many times higher than the market-driven freight rates.
"They decide to account these surcharges on the "weaker link" of the supply chain who does not have much bargaining power when clearing goods for exports or imports, (either the buyer or the seller). This is a well organized mechanism to avoid the pressures of free market pricing mechanism.
"This is why governments must intervene to bring in competition rules and rate filing mechanisms in international trade to understand the anti-competitive pricing methods used by these shipping lines.
"Asia must follow these competition rules and must adapt them from the US and the EU to keep the carriers under check and protect the consumers and manufacturers at large from the threat of increasing anti competitive practices."
