The abolition of liner conferences on the Europe trades is imminent but while the shipping lines are worried about the sea change in the way their business will have to be run, the impact from the ruling will in the near term be quite limited as rates on the Asia-Europe trades are very depressed anyway.
The key takeaway from a talk by the Singapore Shipping Association on the 'Competition Developments in the EU' was that all shipping industry players need to be extremely careful. In future, penalties are expected to be punitive - with a maximum fine of up to 10 per cent of a company's worldwide sales, which could run into the billions of dollars - and there are many grey areas to contend with. All this will lead to huge increases in cost to ensure compliance. Implications for the various parties involved include much less standardization with all lines needing to have their own individual tariffs and supplementary charges as well as rules and regulations, and as a result, much more frequent and flexible changes. While this should theoretically make the market much more competitive and sensitive to prevailing conditions, it could also have the effect of making it very difficult for shippers because they will now have to negotiate separate contracts with every individual line. The smaller Asian shippers in Singapore for example, with lower volume and therefore less bargaining power, may find themselves in a tough position as a result of this.
Read More
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment