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Issue 1 2014 Freight Business Journal G6 to go Transatlantic


The G6 Alliance of container shipping lines are to expand their cooperation to the Asia- North America West Coast and Trans-Atlantic trade lanes. Some 42 ships will be deployed across five services including two pendulum services in the Trans- Atlantic trade lane calling at 25 ports, covering the US East Coast, US West Coast, Canada, Panama, Mexico, and Europe, including the UK. A further 76 ships will


operate 12 Transpacific services connecting 27 Asian and North America West Coast ports. The G6 Alliance, formed in


late 2011 by APL, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui OSK. Lines, Nippon Yusen Kaisha and Orient Overseas Container Line began operation in March 2012 on the Asia/ Europe and Asia/Mediterranean trade. According to a statement, the


scheduled


lines said they would be able to offer twice as many sailings as the existing New World Alliance and the Grand Alliance. The new services are to


begin in the


second quarter of 2014, pending regulatory approval. Details on services and port rotations will be announced at a later date. G6 Alliance members will continue to market their services individually.


Brussels launches shipping probe


The European Commission has launched a formal investigation into several container liner shipping companies to investigate whether they have engaged in anti-competitive practices The Commission says that the companies have been making generally similar regular public announcements on price increases and the date of their implementation since 2009. This may have allowed them to signal future price intentions to each other, and may harm competition and customers by raising prices on the market


for container liner shipping transport services on routes to and from Europe. It is the latest episode in a


process that started with the 2011 ‘dawn raids’ by Brussels officials on shipping company offices. Global Shipping Forum


secretary general, Chris Welsh said it was a clear indication of the Commission’s ‘get tough’ approach to abuses of the European competition laws. Although the Commission has not formally stated which lines it is investigating, it is understood that 14 lines are involved


including virtually all the major players in the deepsea trades. The Commission’s action is


part of a flurry of similar activity by regulators in other parts of the world. Car carrying lines are under investigation jointly by the authorities in Japan, plus the Federal Maritime Commision (FMC) in the US and the European Union. The FMC has also fined two Japanese car carriers – K Line and NYK – for failing to file tariff agreements. In Rusia, a number of container lines are also under investigation for alleged price-fixing.


WTO agrees historic trade deal


The World Trade Organisation agreed a potentially revolut- ionary trade agreement at its summit in Bali on 7-8 December. In what is billed as the first truly global trade deal since the WTO replaced the GATT (General Agreement on Tariffs and Trade) organisation in the mid 1990s, ministers finally negotiated away most the remaining stumbling blocks, including food security and trade facilitation, following


long weeks of arguments, during which the chances of success oſten seemed slim. The so-called Doha Round of negotiations has been going on for the past 12 years. In


fact, so fraught had the


multinational process become that the EU and US had started to negotiate bilateral deals with major trading nations such as South Korea rather than wait for the long and cumbersome WTO process to bear fruit.


Unlike previous trade deals, the


WTO agreement will concentrate on trade facilitation and the removal of red tape as much as on the reduction of import tariffs. During the negotiations, it was pointed out that it can take days or even weeks for imported or exported goods to be finally cleared into or out of some African countries. The deal is said to potentially add about $1 trillion to the value of world trade.


Charles Gee to be wound up


Long-established freight and shipping company forwarder the Charles Gee Group is to be wound up aſter administrators failed to find a buyer for the forwarding part of the business. The company, which employed 250 staff went into receivership on 21


October, citing “acute


cash flow pressures” and appointed FRP Advisory as joint administrators. A buyer was quickly found


for the Group’s road transport subsidiary C&H (Hauliers) which was sold to C M Downton, saving


180 jobs. But market conditions in transport and logistics have remained tough and no buyers have emerged for the remainder of the Charles Gee business as a going concern, says FRP Advisory. Trading has now ceased trading at the remaining Charles Gee companies and most of the remaining employees made redundant. Phil Armstrong, partner at FRP


Advisory and joint administrator, said: “The Group was put into administration following a sharp deterioration in trading leading


to severe cash flow pressures. The


administration process


provided a moratorium while active discussions were carried out for the sale of the business and its assets which resulted in the sale of C&H (Hauliers) Ltd which preserved 180 of the overall 250 jobs of the Charles Gee Group, But regrettably, amid a challenging wider economy for logistics, no buyers emerged for the rest of the business which has now ceased trading and a redundancy process is under way.”


///NEWS More time needed for P3


The US Federal Maritime Commission asked on 5 December for additional information about the proposed P3 shipping alliance between Maersk, MSC and CMA CGM. The move will delay introduction of the proposed agreement – should it ultimately be approved - because a new 45-day regulatory review period will begin from the date on which the carriers submit their replies. At the time of writing (mid- January) they had yet to do so. The FMC’s move was in


response to a request by the Global Shippers’ Forum (GSF), whose secretary general, Chris Welsh commented: “GSF welcomes the vote by FMC


Commissioners so that they can obtain extra information following concerns raised by


GSF, and welcomes the


space created by a new 45 day regulatory review period to scrutinise and thoroughly evaluate the proposed P3 Agreement. When shippers still lack basic information from the P3 about sailing schedules and how services will affect production and distribution, it is absolutely necessary for extra evaluation time for the carriers to respond to questions submitted by GSF regarding the competitive impact of the P3.” It was not clear how the P3


would allocate vessel shares, how the lines would arrive at slot


costs or guarantee competition and whether lines would share information with each other, he told FBJ. Nor was it apparent how decisions to temporarily remove ships from scheduled services would be arrived at. Mr Welsh added: “It is clear


that the P3 goes beyond a normal vessel sharing agreement in terms of its scale and scope and operational arrangements. The ‘game changing’ nature of the P3 is underlined by the response by the G6 alliance and others. We are potentially looking at a fundamental change in the


structure of the global


liner market and the wider competitive environment for shippers.”


Tilbury wins Iberian business


Tilbury’s London Container Terminal has signed a deal to handle OPDR (Oldenburg- Portugiesische Dampfschiffs- Rhederei) services between the Iberian Peninsula, Canary Islands, North Africa and the UK. OPDR will switch from


Felixstowe to LCT from December starting with two calls on services to and from the Canary Islands, Andalusia, Portugal and Bilbao, followed closely by a second service for the Canaries, Morocco, South of Spain and Portugal and vice versa, resulting in four calls per week to the London port. OPDR’s recently launched


Bilbao service operates four 700teu vessels on a weekly


schedule connecting Bilbao with Tilbury in about two days. OPDR’s CEO, Till Ole


Barrelet, described LCT as “a dedicated short sea terminal that understands our business concept. It is essential


sea and short sea operations. This will further secure Tilbury as a key shipping and distribution


location for


OPDR to be close to the clients and have a reliable terminal with an excellent hinterland infrastructure with fast and reliable road and train connections into the main catchment areas.” And at LCT owners, Forth


Ports, chief operating officer Perry Glading, added: “We have invested significantly in LCT, and we will continue to upgrade the site and equipment as we work to integrate container handling across both the deep


with


unrivalled access to London and the South East of England.” LCT handles over half a


million containers per year, and says it is the only UK port truly servicing both deep sea and short sea customers. OPDR’s move to Tilbury


comes at a time of change in the UK container market, with CGM CMA short-sea arm MacAndrew’s decision to switch from Tilbury to Thamesport and the SAECS Europe/South Africa consortium’s


move from


Tilbury to the new London Gateway port.


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