Thursday, March 10, 2016

Shippers Representatives Demand Inquiry Into Container Line Alliances

Box Groups Under Fire for Poor Services and Supply Chain Disruptions
Shipping News Feature
UK – WORLDWIDE – 2015 might rightly be called the year of container shipping alliances with most of the big boys in the industry joining together or attempting to link commercially before being knocked back by the various regulatory authorities. Now the Global Shippers’ Forum (GSF) has spoken out complaining that service levels have deteriorated since the advent of four ‘super alliances’ by the top 20 lines. After the introduction of extra and ultra large box vessels the accusation is that shippers continue to experience poor quality services and disruption to their supply chains through the bunching of vessels, void sailings and delays.

GSF has called for the establishment of a Maritime Industries Supply Chain Forum at an international level to address the full range of challenges facing the sector saying that one year on from the publication of the Organisation for Economic Co-operation and Development International Transport Forum’s report on ‘The Impact of Mega Ships’ there has been no serious response by the shipping industry to the issues it identified

These issues included the wider external costs imposed by mega ships and alliances of others in the supply chain, including shippers, port and terminal operators and governments. Speaking at the International Cargo Handling Co-ordination Association (ICHCA) international conference in Barcelona, Chris Welsh, Secretary General of the Global Shippers' Forum, said:

"Shippers have generally supported cooperation through consortia and vessels sharing agreements as the appropriate means of rationalising costs, provided they themselves receive a share of the benefits in terms of enhanced quality and a wider range of services made available to customers. The onus is on the shipping industry to demonstrate that the bigger ships and alliance business model is the best response to the economic and financial challenges faced by carriers but also adds value to customers.

"We believe cooperation between the main international stakeholders in a new maritime industries forum would enable the wider maritime supply chain to develop solutions to the problems presented by bigger ships and alliances in a constructive and consensual manner. The received wisdom is that bigger ships and alliances are good for competition because of the benefits they are said to confer. If the reality is that they add costs because of the negative externalities they impose on others, and if they restrict choice through reduced service competition, then other regulatory or competition policy approaches may be necessary to deal with the competition issues raised by mega vessels and alliances."