The British International Freight Association (BIFA) welcomes the news that five competition authorities have created a working group that will meet regularly to develop and share intelligence to review suspected anti-competitive behaviour and collusion, using existing international cooperation tools.
BIFA Director General, Robert Keen, says that he hopes the contents of a letter that BIFA sent to the UK Department for Transport in January, which was subsequently forwarded to the UK Competition and Markets Authority (CMA), played some role in initiating the review that the five competition authorities, including the CMA, have now announced.
The UK’s main trade association for freight forwarding and logistics companies says that its members are extremely concerned that practices undertaken by container shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade. BIFA will be making those points in a meeting that it will be having with the CMA in March.
In particular, BIFA members have voiced their concerns about having their contract rates cancelled by container shipping lines forcing them onto the more expensive spot market. Limiting access to the market is causing members considerable concern.
Keen states: “We are convinced that the well-documented chaos within the container shipping sector is leading to commercial power becoming increasingly concentrated, resulting in diminished market choice and competition, and distorted market conditions.
“It will be interesting to see if the five competition authorities find that the current supply chain disruptions are a direct result of anti-competitive conduct.
“BIFA members fully accept that a free market economy is open to all, but are increasingly concerned that the activities of the shipping lines, and the exemptions from legislation from which they benefit, are adversely and unfairly affecting their customers, especially freight forwarders and SME businesses.
“The facts speak for themselves. During a period that has seen EU block exemption regulations carried forward into UK law, there has been huge market consolidation.
“The pandemic has highlighted and accelerated this development, which has also contributed to dreadful service levels and hugely inflated rates, with carriers allocating vessels to the most profitable routes with little regard to the needs of their customers.”
The five competition authorities are joining a growing number of organisations, including CLECAT, FIATA, the US Federal Maritime Commission, and the Australian Productivity Commission, in calling for governments at a national and pan-national level to give careful consideration to evolving business arrangements in the container shipping market to see whether they are in breach of competition law.
