EC move casts doubt on future of conferences

Price collusion is all we object to, say shippers ALAN PEAT IN A surprise move, the European Liner Affairs Association - which represents two dozen leading container lines - has informed the European Commission (EC) that it is willing to end collective pricing. According to Lloyds List this will effectively be the death knell for conferences in their present form - liner groupings which have dictated mutual issues, including seafreight rates for their respective trades, since the 1870s. The lines’ association has offered to stop publishing conference tariffs and instead to negotiate all freight rates on an individual basis. This is not unexpected, according to Nolene Lossau, executive director of the SA Shippers Council, with the European authorities having loudly hinted that liner agreements in the conference format contravened EC competition regulations. “We welcome the move,” she told FTW, “because we support the free market principle. “It’s a wonderful development, because it will make it clear that any collusion by lines on rates is illegal under the competition laws in Europe.” It is also seen as setting a precedent for other government attitudes to shipping conferences on other trades around the world. And it definitely changes the thinking in SA about the conference concept - which was about to be challenged by shippers before the local Competition Commission. “We have been aware that the conference exemption has been under review in Europe,” said Tony Norton, maritime legal specialist at Garlicke & Bousfield and legal adviser to the Association of Shipping Lines (ASL), “and there has been speculation that it would be terminated. “Assuming the article is correct, then this move by the liner association can be seen as the reaction to the process of review.” The local effect, Norton added, is that - if Europe does away with the exemption - then it is “highly likely” that the SA competition authorities will also look less favourably on conferences. “But we won’t withdraw our application for exemption with the Competition Commission because there are other forms of line groupings - like consortia and other agreements - none of which has met with opposition from shipper groups. “All the people I’ve talked to locally, while objecting to the fixed tariffs in conferences, have accepted that consortia are needed in the SA shipping environment.” Lossau agreed - to an extent. “We have no objection to consortia,” she said, “provided they are purely ship-sharing agreements, and there is no suggestion of any form of price collusion.” The whole industry, however, is currently in a wait-and-see position - watching to see whether this latest offer from the lines is accepted by the EC, and whether in fact the voluntary demise of European conferences does take place.