The British International Freight Association (BIFA) recently wrote to the UK government requesting it to investigate the state of competition in the deep sea container shipping market.
BIFA said its members are concerned that certain practices undertaken by the principal 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.
In a letter to Robert Courts, parliamentary under-secretary of state at the department for transport, BIFA’s director general Robert Keen expressed the association’s concern that during a period of well-documented chaos within the container shipping sector, commercial power is becoming increasingly concentrated, resulting in diminished market choice and competition, and distorted market conditions.
Requesting the UK government to investigate competition in the deep sea container shipping market, the British International Freight Association expressed concern that certain practices by the principal container shipping lines, as well as easements and exemptions provided to them, are distorting the free market operations to the detriment of global trade.
“BIFA members fully accept that a free market economy is open to all, but are increasingly concerned that the activities of the container shipping lines, and the exemptions from legislation from which they benefit, are distorting the operations of that market to the shipping lines’ advantage, whilst adversely and unfairly affecting their customers, especially freight forwarders and SME businesses,” the letter said.
“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,” a BIFA press release said quoting the letter.
“In 2015, there were 27 major container shipping lines carrying global containerised trade, with the largest having a 15.3 per cent market share. Today, there are 15 shipping lines, organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40 per cent,” it said.
BIFA is joining a growing number of organisations, including CLECAT and 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 the evolving business arrangements in the container shipping market to see whether they are in breach of competition law.
Fibre2Fashion News Desk (DS)