Europe conference shuts its doors

SAECS becomes purely ship-sharing agreement ALAN PEAT A BONE of contention in the shipping industry for some years, the Europe-Southern Africa Conference (ESAC) in London is due to shut up shop at the end of October. Historically established to fix member lines’ prices for the various costs incurred in their own individual shipping trades, the conference was certainly responsible for establishing a consistent cargo seafreight trade between SA and Europe, particularly in the immediate post-Second World War period. But over the last few decades, this conference, and its sisters on the other sea trades, have become more-and-more contradictory to the world’s competition legislation. In more recent times, ESAC has come under serious fire from the competition authorities of the European Commission (EC), which currently has intentions of ordering conferences to close doors. Despite many efforts by groups of European shipping lines to circumvent the EC’s expected ban, ESAC has been more-and-more under threat – and has continued to drop most of its rate-fixing policies, with the most recent the hand-over of responsibility for the fixing of a recommended bunker adjustment factor (BAF) for its members to the individual lines. What does this closure mean for SA? Very little, as far as this country’s shipping line bodies are concerned. From the point of view of the Container Liner Operators' Forum (Clof) it has no direct effect, according to an un-named forum source. Some of its members are also members of ECSA, FTW was told, but beyond that, there is no link between Clof and the conference. The forum’s parent body, the Association of Shipping Lines (ASL), is equally unconcerned. Mark Koen, executive at Island View Shipping and chairman of the ASL, told FTW that he was unaware of the intended ESAC closure until we told him. But he couldn’t identify any differences it would make to current ASL policies. The one interesting point, according to another un-named party associated with the SA shipping line sector, but not addressed by Koen, is that the ASL application to the SA Competition Commission for exemption for conferences remains in place. The reason, according to this FTW source, is that – despite the end of ESAC – the shipping lines (and particularly the various ship-sharing consortia of lines) on the Europe-SA trade and others, would “know what they can, and cannot do” under local competition authorities’ rulings. And, as part of the latest anti-price fixing philosophy, the SA Europe Container Service (SAECS) consortium has now changed its policy to becoming purely a ship-sharing agreement – with open competition between the various lines in the group.