The British International Freight Association has written to the UK government asking for an investigation into competition within the deep sea container shipping market.
BIFA freight forwarding and logistics company members are concerned that some of the main container shipping companies are utilising competition law to distort the operations of the free market and therefore international trade.
BIFA Director General, Robert Keen says
"BIFA members fully accept that a free market economy is open to all, but are increasingly concerned that the activities of the container shipping lines, and the exemptions from legislation from which they benefit, are distorting the operations of that market to the shipping lines’ advantage, whilst adversely and unfairly affecting their customers, especially freight forwarders and SME businesses.
The facts speak for themselves. During a period that has seen EU block exemption regulations carried forward into UK law, there has been huge market consolidation. In 2015, there were 27 major container shipping lines carrying global containerised trade, with the largest having a 15.3% market share. Today, there are 15 shipping lines, organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40%.
The pandemic has highlighted and accelerated this development, which has also contributed to dreadful service levels, and hugely inflated rates, with carriers allocating vessels to the most profitable routes with little regard to the needs of their customers.
“Drewry recently issued a profit forecast of more than USD150 billion for 2021 for the main container shipping lines for which financial results are available.
“To put that into perspective, this is more than has been achieved in the previous 20 years combined, which many BIFA members consider to be a case of blatant profiteering."
A growing number of freight associations including FIATA and CLECAT are calling on governments to see whether container shipping companies are in breach of competition law.
Kevin Tracey, Manager at Freightlink Reload commented
"As a freight forwarder, we have been directly affected by the changes to the container shipping industry in recent years from a delivery and pricing point of view. Something which we are working hard to prevent from being passed on to our customers. It is definitely time for the operations of the container companies to be investigated."
What are your thoughts regarding the container companies? Let us know on our LinkedIn page
Press Release - Bifa.org