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NEWS Shipping lines in cartel probe Kestrel soars continued from page 1


The European Commission said that it had carried out unannounced inspections at the premises of several container liner shipping companies on 17 May. They formed part of an investigation of European-based lines into whether there had been violations of EU competition law since the abolition of the liner shipping conferences block exemption in October 2008. The Commission said that it had reason to believe that the companies had violated anti-trust rules under Articles 101 and 102 of the Treaty on the Functioning of the EU.


Commission officials were accompanied by staff from the national competition authorities. In a statement, the Commission said: “Unannounced inspections are a preliminary step into suspected anticompetitive practices. The fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself.” AP Moeller-Maersk confirmed that it was one of the companies


it was convinced that its practices conformed to European competition legislation and that it would co-operate in full with the Commission’s investigation. German-based Hapag Lloyd also confirmed that it had been raided by the Commission. In a statement the line added: “Hapag-Lloyd is working closely with the investigating authority. We are convinced that we are in compliance with EU legislation.” Andrew Traill of the Shipper’s


Voice comments: “It would be normal for the Commission to be proactive in monitoring the activities of a sector that has only recently been stopped from operating within cartels. Secondly, shippers and many analysts have often aired their suspicions that


subject to inspection. It said that the Commission said it was investigating possible price and/or capacity agreements among liner shipping companies on trades from and to the European Union and the European Economic Area, and was also investigating whether there is abuse of dominant position on the market. Maersk added that


shipping lines may be colluding in some way over freight rates and surcharges, and even over capacity management, but nothing other than circumstantial evidence for such illegal activity has been forthcoming until now. “Such suspicions are borne from the fact that many lines still make announcements regarding general rate increases and surcharges at approximately the same time and of a similar rate. This could of course be a consequence of market following: there are only a few lines which handle the lion’s share of global container traffic, so it would be relatively easy to react quickly to and in-line with a competitor’s new rate and surcharge announcements in the media. Some might argue that the liner shipping product varies very little from one carrier to another and therefore, rate and surcharge movements might be expected to be of similar proportions. “The difficulty


people have


in believing these arguments is, however, because the lines have legally been permitted to collude on rates and surcharges in the past. Legal protection for this activity


was removed by the European Commission in 2008, but other countries of the world still sanction it in one form or another. Therefore, observers might be forgiven for thinking a leopard seldom changes its spots and that old habits die hard. “I am unaware of any formal complaints to the European Commission concerning anti- trust activities of liner shipping companies. The Commission can, of course, carry out ‘dawn raids’ as part of its own enquiries: it too must surely observe the similarities in charges and the timing of their announcements and implementation. It does not necessarily follow that this will lead to any prosecutions.


“But it does serve to warn shipping lines


about the


impressions they can create when they engage so closely in cartels and discussion groups around the world and then issue very similar announcements regarding rates, surcharges and capacity changes. Such impressions will only serve to shine the spotlight onto the sector even more than might otherwise occur.”


Hammond consults on trust ports sale


Secretary of State for Transport Philip Hammond has launched a consultation on the criteria for sale of major trust ports in England or Wales. The exercise will run for six weeks until 27 June.


The ongoing consultation on the sale of the Port of Dover would meanwhile be suspended, said the Secretary of State.


He added that no applications for sales of trust ports would be considered unless they were likely to deliver significant community participation, adding: “Such participation could take a variety of


forms, but must include the ability to influence the port’s long term development and may include the right to receive a share in the profits of the port, or the future increase in its value. It does not necessarily require a community role in the operation of the port.” It was also desirable that any sales delivered employee participation in the ownership of the port, such as the right to receive equity shares or a share in its future success. Sales should also represent good value for money, taking into account benefits to the community


and the wider economy. Nor would the Secretary of State approve an sales that reduced competition. Major trust ports are defined as those with an annual turnover above £7.6m and would include Dover,


Tyne, Milford Haven,


Shoreham, Poole, Harwich Haven and the Port of London Authority.


The Unite trade union said it welcomed the re-opening of consultation on the future of the Port of Dover. It has been backing a plan to create a ‘People’s Port’, in opposition to the Dover Harbour


Board’s own privatisation plans.


new agencies involving the North Atlantic and Far East trade. Other possible developments include buying a container haulier and even developing sea-air business to the Caribbean in conjunction with Tropical Shipping.


Developing from small beginnings, Kestrel Liner Agencies had often been seen by its rivals as “a pain but not a threat” and it had grown to its present size almost unnoticed, said Thorne.


While margins in liner agency are notoriously tight, he had been able to pick up business by offering carriers – particularly niche operators such as heavylift or breakbulk lines – a more personalised service based on a partnership approach. “We like to act more like a partner – the days of just being an agent are over,” Thorne declared.


While the general trend in shipping has been for liner operators to set up their own offices in their main markets, liner agents could still offer big advantages, Thorne argued. “Freight rates are under pressure, and the lines are


ISSUE 3 2011


having to maintain very expensive offices. But shipping liner agents offer a variable cost option and, importantly, we’ve also got an incentive to sell cargo – we’re not just there to stamp bills of lading,” he said.


While shipping lines may not wish to be seen as closing down their own establishments, one possible way forward might be a joint venture approach with the carrier maintaining its own branded ‘front office’ but with the backroom operation handled by an agent, Thorne added.


Most of the former Johnson Stevens Agencies major lines have transferred to the new JSA Global with the exception of Unifeeder, which was unable to agree terms; Johnson Stevens was making a loss on this business, said Merrygold. Mr Thorne added that the Unifeeder operation was a complex one with multiple port calls in the UK and a large marine department. Unifeeder has now set up a UK head office at Langer Road Felixstowe.


As reported in the previous issue of FBJ, Johnson Stevens had already sold its shares in China Shipping UK Agency to the principal.


Thistle finds new field


Logistics specialist Adamslie Holdings has bought Scotland’s Thistle International Freight. Paisley-based Thistle was established in 1987 and remained a family-owned business until the retirement of managing director Ian Whyte retirement in February. The company, which operates a 60,000sq ft site, specialises air, sea and road fright, import customs, courier services and warehousing for customers in the ship management, engineering and wine and spirits sectors.


Dover privatization is off for the time being


The acquisition of the Scottish freight forwarding firm builds on


Adamslie Holding’s portfolio of freight specialist businesses, which includes Bellshill-based TPC Freight Management.


Thistle International director Margaret Fletcher said: “We are delighted with the acquisition. The Thistle team, which remains largely unchanged, will continue to deliver high quality logistics solutions to our customers around the world. We are really looking forward to building on the strong foundations of customer focus and quality of service laid down by the Whyte family over the past 24 years.” (New MD for TPC p.12)


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