Tripartite ShippersÆ Group unites against conference immunity
The Tripartite Shippers’ Group comprising organizations representing shippers in the United States, Europe and Asia, has called for the outright elimination of the liner carriers’ antitrust immunity that permits liner conferences and discussion agreements to set rates.
In a joint statement signed after the group’s annual meeting in Margaux, France Sept. 11-13, the Tripartite Shippers’ Group said it believes the primary function and role of ocean carriers’ conferences and discussion agreements “have far outlived their original purpose.”
“In today’s marketplace, collective pricing for services has been eliminated in every other industry except liner shipping,” the group noted.
The statement hardens the common position of the group’s member associations against conferences and discussion agreements. Representatives of the U.S. National Industrial Transportation League and Japan Shippers’ Council have signed the strong statement, alongside the European Shippers’ Council, which has long campaigned against the carriers’ joint pricing immunity.
The shippers’ organizations discussed the current review by the European Commission of Regulation 4056/86, which grants immunity to conferences serving Europe.
The Tripartite Shippers’ Group pledged to support the review of the European regulation and provide to the European Commission “empirical data on the effects of Europe’s current regulatory structure on shippers.”
The group said the objective of the commission’s review should be “to bring about reforms which recognize that pricing should be individually set based on a carrier’s individual costs calculated with a fair return on investment and reasonable profit.”
“If there is a removal of the antitrust immunity of conferences in Europe, the pricing (system) should change,” said Peter Gatti, executive vice president of the NIT League, who attended the tripartite meeting. “Pricing should not be predicated on what other carriers do.”
Gatti said the European regulatory review was one of the priority items of the joint meeting.
“The Tripartite Shippers’ Group feels that the European Union’s deliberations into its liner regulatory framework should proceed as deliberately and expeditiously as possible,” the group said.
The Tripartite Shippers’ Group recognized that recent regulatory changes in North America have resulted in “a freer and more competitive ocean liner transportation environment.”
“The Ocean Shipping Reform Act made the immunity less of a problem,” Gatti said, referring to conferences and discussions in the U.S. However, he added: “We have never been in favor of the antitrust immunity.”
When the NIT League discussed legislative changes before the enactment of OSRA, the league’s position was that it would accept the retention of the carriers’ immunity in return for concessions such as the confidentiality of service contracts.
Gatti said the NIT League would provide to the EC or the European Shippers’ Council some empirical data on the impact of U.S. conferences, but warned that this data is difficult to gather because of shippers’ reluctance to disclose their proprietary information.
Gatti also stressed that discussions on the removal of the antitrust immunity at the recent Tripartite Shippers’ Group focused on the collective pricing issue, not on shipping lines' operations-related cooperative agreements.
On security in freight transportation, the Tripartite Shippers’ Group said a continuing challenge is the need to support “new security initiatives that are effective in protecting the world’s supply chain from terrorism, without those same measures serving to cripple the very system they are designed to protect.”
The group agrees that governments and industries must work as partners to ensure that new security standards will meet their intended purposes.
“To the most practicable extent possible, these security measures must be compatible and fashioned in such a way so that world commerce is not made the unintended victim in this process,” the group said.
In particular, the shippers’ group said it supports:
* Programs that identify “high risk” cargoes that could present a threat to life, infrastructure and the overall supply chain.
* The promotion of new technologies that will supplement existing security safeguards.
* Advancement of automated advanced cargo manifest systems that are predicated on moving freight seamlessly.
* Establishing a standard security framework for the world’s major trading partners.
* Programs that will produce a safe and secure supply chain in which the costs are “equitably shared among all parties involved.”
The meeting marked the 10th anniversary of the tripartite group. The Korean Shippers’ Council, the Federation of ASEAN Shippers’ Council, the Hong Kong Shippers’ Council, the Thai National Shippers’ Council, the Philippine Shippers’ Bureau and the Singapore National Shippers’ Council also attended the meeting.