Wednesday, July 2, 2014

News Updates - West Coast Port Negotiations and Eurotunnel's RoRo Freight and Passenger Ferry Ban

Latest Statements Confirm Positions of Participants
Shipping News Feature

US – UK – FRANCE – Following two recent stories we have received updates on the US West Coast labour negotiations from the parties involved in thrashing out a new, long term, dock working contract, and a clarification of the position of the UK Competition and Markets Authority (CMA), which has ruled that Groupe Eurotunnel must close its MyFerryLink cross channel RoRo freight and passenger services within the allotted six months.

First to America where it seems, for now at least, the tone we took in our last article is so far proving more accurate than that of the forecasters issuing notices of doom and gloom with predictions that a strike was seemingly inevitable and set to cost the US economy billions of dollars a day. In a joint statement last night from the union and employers they say:

“Negotiations for a new labor contract covering nearly 20,000 dockworkers at 29 West Coast ports will continue to move forward as the existing, six-year coast-wide labor agreement expires today at 5 p.m. PST. While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU).

“Both sides understand the strategic importance of the ports to the local, regional and US economies, and are mindful of the need to finalize a new coast-wide contract as soon as possible to ensure continuing confidence in the West Coast ports and avoid any disruption to the jobs and commerce they support. The coast-wide labor contract is between employers who operate port terminals and shipping lines represented by the PMA and dockworkers represented by the ILWU. The parties have negotiated a West Coast collective bargaining agreement since the 1930s.”

The tone of the release mirrors previous such statements when historically negotiations have been at an advanced stage, as opposed to the often strident tones employed when the two have been poles apart. It is to be hoped that such positive attitudes are maintained throughout the days to come.

In our last article on the insistence by the CMA that the ferries employed by Eurotunnel subsidiary, MyFerryLink have to be sold off and the company closed, the Authority has responded by stating to the Handy Shipping Guide that it does indeed have the powers to impose its judgement insisting on the cessation of MyFerryLink operations without the need for new legislation. Normally the CMA would insist on a sell off order but this is clearly negated by the ruling of the French Court which only allowed the sale of ex SeaFrance assets subject to that five year ‘no sell on’ ruling.

The CMA says this is merely confirming the earlier Competition Commission finding whose powers it inherited in April this year. The statement makes clear that ignoring a CMA Order, something we alluded to in the last piece, would be a serious matter and certainly enforceable by the courts. We also postulated that there might be an unwelcome detrimental effect on the Port of Dover with a reduction in sailings but the CMA makes clear the action would be aimed at MyFerryLink rather than the ports, whatever their views might be.

The CMA goes on to deny the suggestion, made by the Eurotunnel Chairman, that it had ignored the subsea carrier’s suggestion to ‘seek a convergence of views with its French counterpart through the offices of the European Commission’, saying there is no scope either legally, or practically to do so and that any further appeal would be heard in the UK (certainly to start with) at Competition Appeal Tribunal and then Court of Appeal.

In closing the CMA states that it is not the mechanism whereby Eurotunnel/SCOP acquired the ships that is unfair, but the situation it’s created, the seemingly circular paradox with French authorities holding one view and the British another. The CMA believes very strongly that with the tunnel operative this leaves room for only two operators on the Dover – Calais route and it’s not about creating duopoly or reducing competition, but what the identity of those two operators might be. Clearly this rules out a service linked financially to the tunnel operator which then holds a percentage of cross channel traffic in excess of what the Authority would consider fair competition.