European authorities should be concerned about the shipping lines not returning benefits to the market users, as stipulated by the Consortia Blok Exemption Regulation (CBER).
Main characteristics of what is happening on the market can be described as follows:
– low-quality services that are not configured to benefit customers
– increased rates for poor service quality or lack of services
– concentrated services on particular lanes, with the other lanes get abandoned
– reduced port calls and traffic densities
– cargo stranded at ports for longer periods that expected
– not-fulfilled contractual obligations in long-term contracts
– blocked release of containers at shippers’ own account and aggravated problem of the lack of containers
– continuing practice of blanc sailings
The current strategy of shipping lines, especially in the current situation of the pandemic, impacts not only individual shippers but obstructs global transport flows and international trade. Freight forwarders, shippers, logistics service providers on different levels and other actors are part of the supply chain. The only actor of the whole supply chain who benefits from the current set-up of terms and rules is shipping lines, the setter of the rules.
ESC calls on the European Authorities to look carefully at the current situation and take action to ensure that trade and transport flows are guaranteed under a frame of fair play rules, and not killed by the lack of service and profit-gaining by the shipping lines only, at the expense of the other actors of the supply chain. The CBER stipulates that any benefits that the carriers derive from the alliances should be returned to the market users. ESC believes that the shipping lines are taking advantage of the current disruption to make massive profits but unilaterally.
For more information, please see the ESC’s opinion in news articles: