Call to end liner anti-trust immunities

By Leo Ryan, Montreal

Leading shipper associations have launched a co-ordinated campaign against continuing anti-trust exemptions for liner conferences, particularly those in Asia.



Meeting in Montreal, the Global Shippers' Forum called for a worldwide eradication of carrier block exemption from competition laws along the lines of the regulatory upheaval taking effect in the European Union on October 17.



Top representatives from the European Shippers' Council, the US National Industrial Transportation League, the Asian Shippers' Council, the Canadian Industrial Transportation Association, and the Japan Shippers' Council, as well as from shipper groups in Australia and Africa, issued a joint declaration at the conclusion of a three-day meeting in Montreal this week.



“GSF members strongly believe that European reforms repealing liner block exemption, as well as changes brought about in North America, would provide comparable benefits for Asian countries, resulting in less influence by conferences and discussion agreements over rates,” the GSF said.



In particular, the shipper groups urged China and India to extend their anti-trust laws to liner shipping. 
Referring to the need for future introduction in Asia of market-based regulations, the GSF noted:



“Competition between suppliers, rather than collusion, will result in efficiencies and customised services for their customers that are not possible where prices are determined by liner carriers in government-sanctioned cartels.”



The GSF recognised that shippers and liner carriers, working together, “can achieve competitive and efficient relationships.”



Asian Shippers' Council chairman John Lu applauded the European initiative as “a victory for world trade that Asia should emulate”.



Japan Shippers' Council managing director Ted Kawamura said that Chinese shippers are seeking marine regulations that will fall in line with the current anti-trust laws.

Chinese authorities could review this matter early in 2009, Mr Kawamura said.



“I am confident that China will look at this seriously because it is an exporting country and does not have sufficient shipping capacity to meet demand,” he said.



“India is also starting to look at regulations to protect shippers.”



The shipper associations encouraged the United States to undertake a comprehensive review of its own shipping laws to determine whether an anti-trust exemption should continue to exist for liner carriers.



These associations reiterated that “antitrust immunity, as it relates to the ability of liner carriers to benchmark, discuss, set or fix rates, service terms and/or surcharges, is not necessary and should be terminated”.



NITL president Bruce Carlton recalled that when the Ocean Shipping Reform Act was enacted ten years ago, it was hailed as a major success for shippers in the US and abroad.


“But a lot has happened since then in global trade and in regulatory perspectives everywhere. Topping the list is the European Union's abolition of block exemption for liner shipping.”



While retaining carrier antitrust immunity, analysts agreed that OSRA undermined the conference system by allowing confidential shipper-carrier contracts.



“But there is still residual protection for liner conferences in the United States,” European Shippers' Council chairman Dick Vandenbroeh Humphrey told Lloyd's List.



For its part, the Canadian government has been careful not to adopt a different approach from the US. The 2001 Shipping Conferences Exemption Act does not contain a sunset clause, as desired by Canadian shippers, that would have removed the anti-trust immunity within five years.



“The competitive situation between American and Canadian ports rules out a go-it-alone approach by Canada,” said CITA president Bob Ballantyne.