‘Demise of conferences would drive out smaller players’

ALAN PEAT
THERE IS still no word on where the application by the Association of Shipping Lines (ASL) for exemption from certain clauses of the Competition Act has gone. According to legal sources in the ASL, nothing has yet been heard from the Competition Commission to whom it was submitted. And, despite FTW having spoken to six people at the commission, none claimed to have any knowledge of its whereabouts. The Easter holiday break then resulted in nothing but a series of recorded telephone messages from parties we had been advised would be able to supply an update. At the same time, a source associated with the shipping industry suggested that there was a feeling that the commission was possibly waiting for the precedent from one of the other major jurisdictions on the issue of shipping lines’ exemptions. It was suggested that this might be the European Commission (EC), whose competition authorities’ conditions on the Maersk takeover of P&O Nedlloyd had been accepted as the basis of the SA commission’s findings on the same matter. However, there was a new feeling in the shipping industry in SA, according to FTW’s source. This relates to line conferences as they have existed for well over a century – and which would be threatened with extinction if the current exemptions allowed to shipping line groups were to be removed by EC decree, and then by the SA competition authority. If that was the case, said the source, it would effectively see the major shipping lines on the SA trade doing their own thing, and the small players being driven out of the market. “It would mean that the big guys would have more control over the market, and freight rates would inevitably go up,” he added. This, he suggested, would be contrary to what shippers argue – that the termination of conferences would see more competition, and lower rates.