European Shippers Council urges free market to dictate freight rates
THE European Shippers Council (ESC) has held a high level meeting in response to the worrying news about further potential anti-competitive developments in the shipping liner market with some shipowners talking of massive rate hikes in the New Year.
In a release, the ESC pointed out that already in the past two years a few examples of apparently-coordinated moves have been highlighted, including the simultaneous application of slow-steaming conditions or instant service reduction by all the major liner players.
"Again some recent market announcements cast some doubt about the full application of market mechanisms in this industry," the release added pointing out that major reefer shippers have just been informed by various liner groups that as from January a general rate increase of US$1,500 per refrigerated container will be implemented; in many cases, regardless of the loading and unloading ports.
Last week a number of ship owners communicated their intention to increase the rates for shipping a container from Asia to the Mediterranean by 66 per cent and from China to North Europe by 35 per cent.
Both announced rate increases came as a surprise considering the market situation in which an imbalance exists between an over-supply of liner capacity and low demand for that liner capacity, the release said. Furthermore, at this time of the year, there is a cyclical downturn as most Christmas cargo have been shipped in October.
The ESC considers this a sufficiently serious and urgent matter to raise it at the European Commission level and requested DG Competition to launch an investigation into this market development.
THE European Shippers Council (ESC) has held a high level meeting in response to the worrying news about further potential anti-competitive developments in the shipping liner market with some shipowners talking of massive rate hikes in the New Year.
In a release, the ESC pointed out that already in the past two years a few examples of apparently-coordinated moves have been highlighted, including the simultaneous application of slow-steaming conditions or instant service reduction by all the major liner players.
"Again some recent market announcements cast some doubt about the full application of market mechanisms in this industry," the release added pointing out that major reefer shippers have just been informed by various liner groups that as from January a general rate increase of US$1,500 per refrigerated container will be implemented; in many cases, regardless of the loading and unloading ports.
Last week a number of ship owners communicated their intention to increase the rates for shipping a container from Asia to the Mediterranean by 66 per cent and from China to North Europe by 35 per cent.
Both announced rate increases came as a surprise considering the market situation in which an imbalance exists between an over-supply of liner capacity and low demand for that liner capacity, the release said. Furthermore, at this time of the year, there is a cyclical downturn as most Christmas cargo have been shipped in October.
The ESC considers this a sufficiently serious and urgent matter to raise it at the European Commission level and requested DG Competition to launch an investigation into this market development.