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The challenge facing shippers and carriers
  Date:10/28/10  |  From:ifw-net  |  Click:

The Freight Transport Association (FTA) has spelt out the challenges facing shippers and carriers in the context of the modern regulatory landscape.

Speaking at the European Maritime Law Association (EMLA) annual conference, Chris Welsh, FTA's Global & European Policy General Manager, said: "It has been two years since we banned conferences and price fixing in Europe, so it is timely to assess how the maritime transport industry has tackled issues such as excess capacity, fleet modernisation and seasonal fluctuations, issues made more acute during severe economic crisis."

"Regulators, including the European Commission, the US Federal Maritim Commission ( FMC) and the US Congress, have put the spotlight on the maritime transport sector and it is in this context of intense scrutiny that the maritime industry now operates; it is crucial that all parties are aware of the legal framework in which they operate."

The benefits of tighter regulation have certainly been felt by shippers, and ultimately consumers, in Europe where it has afforded them greater protection from the knock-on impacts of the worst global recession since the 1930s. However, Welsh acknowledged that there is still a lot of work to do before European shippers can benefit in full from the relatively recent adoption of a much tighter legal framework.

Welsh continued: "In other corners of the globe where competition law is not enforced, overcapacity has not yielded lower prices. Instead, due to the price fixing made possible by liner conferences, the US and Asia have bore witness to cynical rate rises."

"While these effects are more muted in Europe, we have seen rates increased in lock step fashion and with common strategies in response to the crisis, despite the hard fought exemptions we secured two years ago. Shippers are rightly questioning precisely how capacity is being managed and the EMLA conference is the perfect forum with which to address the issue."

Welsh added:"Shippers want to build long-term partnerships with carriers and the best environment for that to happen is one free from cartel influence and one where customers and supplies can jointly develop their market strategies in a normal contractual framework."

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