NEWS\\\


Issue 3 2015 - Freight Business Journal


7


Forum calls for more monitoring of ‘unreliable’ alliances


The Global Shippers Forum (GSF) has called for key performance indicators (KPIs) to give customers confidence that ocean shipping alliances can deliver tangible benefits such as reduced costs, competitive ocean rates and improved services for shippers. Speaking at the ‘Transport Week


Conference’ in Gdansk, Poland, GSF secretary general Chris Welsh said KPIs were necessary to sort out the current lack of reliability and predictability of the alliances’ joint operations. He said: “Such confidence-


building measures are necessary in view of the concentrated market power of the four main alliances covering the world’s main trade lanes and smaller niche and regional liner markets which are directly or indirectly impacted


by the alliances. That confidence and trust will be withheld so long as alliance members continue to discuss, fix or agree rates or rate guidelines in conference or discussion agreements, such as the Transpacific and Inter-Asia discussion agreements.” The GSF describes the new


alliance agreements as “a new breed of enhanced cooperation agreements in the liner shipping sector that go well beyond traditional consortia or vessel sharing


agreements.” share, While


alliance members are competing with each other for cargo and market


they also have


mechanisms for sharing strategic information on costs, future capacity investment decisions, trade lane capacity deployment, port and terminal operations,


and potentially even prices and surcharges. Welsh stated: “The alliance


lines’ leadership should take the ultimate confidence building step of pulling out of all conference and discussion agreements to give assurance that the exchange of sensitive information,


including


pricing information, on a regular basis within alliances does not lead to abuses of their market power or erect barriers to market entry.” GSF has welcomed the


markers laid down by the US FMC and MOFCOM, the Chinese competition authority, with regard to the abortive P3 agreement. The monitoring conditions recommended by GSF and introduced by the FMC to monitor capacity and rates ultimately led


to China’s decision to reject the P3, Welsh added. The GSF is calling on the EU,


US, and Chinese regulatory and competition authorities to share monitoring data and information to prevent potential competition abuses. Welsh concluded: “Shippers


understand that we have a shared interest with the liner companies to provide a long-term sustainable framework for investment in liner shipping services and the wider maritime logistics supply chain. Clearly the 2M, G6, CKYHE and Ocean Three leaderships believe that mega-alliances are the answer to a sustainable future for the liner shipping industry. With that, let us agree a workable and rigorous set of monitoring KPIs that can provide the required


level of confidence to customers that alliances will not only deliver service and cost improvements but give reassurance to shippers that they can confidently invest in their maritime and logistics supply chains.” GSF was continuing to add


members, the latest being Sri Lanka, said Chris Welsh, and it was now represented in Australasia, Asia, Africa and South America. The Forum will hold its annual general meeting in Toronto in June. On the subject of


airfreight


surcharges, Welsh said that different customers tended to want different things, but “the most important issue is price and tariff transparency.” While many shippers would favour all-in rates with surcharges rolled up into


GSF develops standard container contract


The Global Shippers’ Forum has developed a standard ‘boilerplate’ container shipping contract in partnership with global shipping organisation, Bimco, which will launched on 24 April. Believed to be the first of


its kind, it aims to emulate the contracts drawn up by larger


shippers for smaller customers. GSF secretary general Chris


Welsh said that it was mainly aimed at shippers dealing direct with shipping lines; for those using a freight forwarder, the latter would normally be the principal. Welsh also added that it was advisable to use the new


contract in conjunction with GSF’s legal advice service, which is free to GSF members. The new contract modifies the


standard terms and conditions offered by shipping lines and embodied in the bill of lading. It gives the opportunity to agree firm prices and decide what add-


ons and surcharges there should be.


Welsh said: “It’s aimed at


shippers who don’t have a contract, and who otherwise would have no than


rights the carrier’s other terms and


conditions.” He added that contracts generally came into


their own when things go wrong, pointing out that a verbal agreement or exchange of emails was not generally recognised as a contract – or at any rate would only apply to the shipment to which it referred, and not to repeat business. “There are many shippers, even large ones, who


thought they had a contract when in fact they didn’t,” said Welsh. Welsh added that there was


no reason in principle why an airfreight version could not be developed, although freight forwarders are much more likely to be involved in air than in maritime transport.


the main rate, there were caveats, especially if currently high surcharges were rolled up just at the point where world fuel prices were starting to fall. Welsh would also encourage


airlines to draw up service level agreements. “Aſter all, we have it in the rest of the logistics chain,” he said. Surcharges could cause


shippers problems with budgeting, if they fluctuated significantly and began to eat into profit margins. He pointed out that the Freight Transport Association – where GSF is headquartered – also offers a logistics buyer’s service which monitors which way fuel prices are moving


for the different


modes of transport and gives an early indication of the longer term trends.


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