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The Asian Shippers’ Council (ASC) is hopeful that the introduction of “The Shipping Act of 2010 (H.R. 6167)” by the US Congress will pave the road for Asian governments to put an end to shipping cartels hiding under shipping conferences and rate discussion agreements.

The ASC, quoting its chairman John Lu, said on its website that: “News of Congressman James Oberstar’s proposed legislation to end the cartels is music to our ears. For years we have asked our governments to put the necessary mechanism in place to rein the cartels in but our pleas have fallen on deaf ears.”

The new ocean shipping reform bill follows shipper complaints over price spike, cancelled bookings, rolled cargo and container unavailability, which have disrupted imports and exports.

Lu said while Asian governments did nothing, the US Congress led by Congressman Oberstar, Chairman of the House Transportation and Infrastructure Committee, mounted an investigation that culminated in the introduction of the new bill.

If passed, the new act will be largely in line with Europe, which prohibits lines from coming together to discuss and agree on rates following the repeal of the block exemption regulation 4056/86 in October 2008. It will be a catalyst for change, as the US has an annual merchandise trade of well over USD$2 trillion (NZD$2.69 trillion).

“When the European Union outlawed shipping conferences and rate agreements in 2008, Singapore took the position that conferences were still permitted in large swathes of the world; hence its decision not to review the exemption accorded to liner shipping agreements in the Singapore Competition Act. But the Competition Commission of Singapore cannot so easily dismiss the issue if the US were to join the EU in banning the cartels,” said Lu, who is also Chairman of the Singapore National Shippers’ Council.

At the recent Global Shippers’ Forum annual meeting in Macau, attended by shippers from Asia, North America, Europe and Africa, it was very clear that carrier practices in Asia as well as Africa were much worst than in Europe and North America.

Lu said Asian governments’ failure to act gave shipping lines the freedom to collaborate to impose sharply higher rates. “We also have to put up with some ridiculous surcharges – a peak season surcharge outside the traditional peak season and emergency bunker surcharge even when bunker prices are stable. In the past year rates ex Asia to the US rose by over 180%,” said Lu.

As Asia is the last battleground between shipping lines and shippers over the ending of the shipping companies’ cartel, shipping lines will not cede without a fight.

They are already consolidating their presence in Asia and are rallying the support of governments.  The waves of maritime regulatory reform, which began in Europe, will extend to the US and soon, Asia. – Source: Asian Shippers Council website


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