BIFA is currently working with a number of organizations including CLECAT, FIATA, FMC and the Australian Productivity Commission to pay attention to whether the 3 alliances have violated competition laws.
By Arthur Chen Photo：Colin Lloyd
It's time for the liners ! They should be responsible to bring the empty containers stranded in ports back to Asia.
Following from article last week that the European Association of Freight, Transport, Logistics and Customs Services (CLECAT) warned that the strategic expansion of certain shipping lines such as Maersk may violate EU monopoly laws, there is another call from the British International Freight Association (BIFA). The British government is investigating the current competition in the container shipping market. The news pointed out that BIFA members are concerned that certain practices taken by major container shipping companies are not conducive to the operation of international free trade. BIFA Secretary-General Robert Keen wrote to Robert Court MP, Under-Secretary of State for Transport, expressing the association's concerns that during the supply chain chaos in the container shipping industry last year, the three major shipping alliances were becoming more and more concentrated. Market choices and competitive conditions have diminished, and market conditions have become increasingly distorted. BIFA members fully accept that a free market economy is open to all, but the activities of container shipping lines and the legislative exemptions from which they benefit have distorted the functioning of the market and feared that the impact would cause harm to customers, especially service providers in global logistics and small & mid-size enterprises in unfair conditions.
According to historical analysis, during the period when EU block exemption provisions were incorporated into UK law, there was significant intergraded In 2015, there were 27 major container shipping companies carrying global containers, the largest of which had a market share of 15.3%, and now there are 15 shipping companies forming three major shipping alliances. On some key routes, the market share of a single alliance may exceed 40% such as the 2M alliance. This has been accelerated by the pandemic, which has led to the three major alliances quickly deciding to increase freight rates and allowing operators to allocate ships to the most profitable routes without considering customer needs at all. Since the profits of the three major shipping alliances in 2021 exceed the windfall profit level of the past 20 years by more than 200 billion US dollars, and it will also directly drive inflation. BIFA is currently working with a number of organization, including CLECAT and FIATA, the US Federal Maritime Commission and the Australian Productivity Commission, to call attention to competition law violations. It is hoped that these actions will allow international shipping to return to a normal freight rate structure sooner, at least partially reducing the pressure on global inflation.
It is also worth reminding readers that there is another unremarkable news. Container dwell fee at the Port of Los Angeles has been delayed for 2 months, making everyone forget the measure to urge the solution to the supply chain disruption caused by the backlog of containers at the ports. Finally, on December 30, 2021, it was announced that from January 30, 2022, shipping companies will be charged for overstaying of empty containers. The new fee program will charge $100 per container for empty containers that are stranded at the terminal for nine days, with an additional $100 for each additional day of detention. The exact timing of the implementation of the charges will be determined by the Executive Director of the Port of Los Angeles. The Port of Los Angeles Board of Directors will consider the plan at a Jan. 13 board meeting. Meanwhile, the Port of Long Beach is also considering this option. Gene Seroka, executive director of the Port of Los Angeles, said: “While we have had significant success in reducing the number of import containers stranded at the terminal over the past two months, there are currently too many empty containers waiting to be exported at the terminal.”
The Port of Los Angeles announced a similar program on Oct. 25 for stranded import containers. Since October 24, 2021, there has been a 53% decrease in imported containers with a dwell time of more than nine days, and ports have also continued to delay charges for imported containers, the most recent delay being on December 27. There is still a month before the charge for stranded export empty containers takes effect, and if the backlog of empty containers at the Port of Los Angeles is reduced, it is expected that it may be extended like the previous charge. There is no reason for the shipping lines to push these empty containers to cargo owners or forwarders. We believe that this time there should not be a lot of opposition to the charges. Shipping lines must solve their own problems and send empty containers back to Asia as soon as possible to avoid being fined. From the point of view of the cargo owners, the shipping lines should be responsible for the measures taken by the Los Angeles Port to export empty containers.
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