Wednesday, 19 September 2007 00:00
Europe's ruling to outlaw monopolistic practices by October next year seen as a precedent By NISHA RAMCHANDANI(SINGAPORE) Asia is the next in line for maritime regulatory reform to eradicate monopoly practices by liner shipping companies, following similar efforts in Europe and North America, an industry forum was told yesterday.
The message was the main thrust of the Joint Shippers' Declaration that was signed yesterday in Singapore on the final day of the 14th annual meeting of the Global Shippers' Forum (GSF), which opened on Sunday.
The task will not be easy, admitted John Lu, chairman of the Asian Shippers' Council (ASC), taking into account the various countries in the region, each with its own political and economic systems.
Still, he remains confident that such regulations can be brought in, and rather more rapidly than the 20 or so years that it took the European Shippers' Council (ESC) to work on them. India and China have already begun to initiate such reforms.
Mr Lu reckons that Europe's recent ruling to outlaw monopolistic practices by October 2008 will be seen as a precedent.
He said the sooner Asia overhauls the relevant maritime regulations the better. 'Then you would really have a globalised world that is led by commercial economic force rather than artificially determined by cartel. This cartel system is quite unthinkable,' he said.
He said no other industry in the world operated a similar system.
Mr Lu identified three different categories for the various countries in Asia: service buyers, service sellers, and facilitators.
He suggested that service buyers such as China have the most to gain and would be keen to implement such a change, possibly even in the space of a year.
Service sellers would understandably be less enthusiastic, while facilitators - small states such as Singapore and Hong Kong - would not want to be overly involved in this argument, he said.
Peter Gatti Jr, executive vice-president of the US-based National Industrial Transportation League (NITL), said it would be easy to monitor signs of collusion as it would be apparent if carriers were moving along a similar fashion.
He said: 'It's a complaint-driven process. And that's exactly how this will probably work in Europe. There will be complaints if there is some effort to try and find a loophole.'
Another key point in the joint declaration was the support for security measures which will serve to protect the world's supply chain.
However, concerns were raised over the US 'scan all containers' provision, as it would be costly and would impede efficiency. Increasing congestion was cited as another problem and the GSF pledged support to private sector and government partnerships so as to overcome this.
The GSF also agreed that all surcharges and ancillaries should be temporary and used only to compensate carriers in the event of unforeseen short-term increases.
Terminal handling charges were recognised as an important part of the freight and the GSF supported the notion of an 'all inclusive freight'.
Other significant areas of the agreement included support for measures that would reduce greenhouse-gas emissions, the liberalisation of air transport, and greater efficiencies through communication as well as improving freight transport efficiency through performance measurement.
The declaration was signed by the ASC, Canadian Industrial Transportation Association, the ESC, Japan Shippers' Council and the NITL.
The GSF represents various shipper groups from North America, Asia, Africa, Oceania and Europe.
Talks are under way on including other groups, such as those of Latin America, as part of the GSF.
