Has disruption and high freight rates been created by competition authorities?

Date Added: 13 July 2022

Has disruption and high freight rates been created by competition authorities?

Anyone who contracts with us to move their ocean freight consignments will be well aware of the difficulties and issues that have been faced over the last two years, with space hard to secure and rates at all time highs.

With a comprehensive portfolio of ocean freight forwarding services around the globe, Davies Turner has continually assesed the situation and done its utmost to address the issues in order to serve our clients.

We were interested to read a report on the Loadstar website that states that competition authorities around the world have facilitated the disruption in global supply chains by effectively creating “a supportive legal framework for alliances and consortia” to manage global rates.

That’s one of the conclusions of a report issued yesterday by the International Transport Forum (ITF) a think tank that is politically autonomous, but administratively integrated into the OECD, which adds that effectively global regulation has failed shippers and forwarders by engineering a situation in which shipping lines can legally ‘manufacture’ capacity shortages.

The ITF argues: “The logical outcome of this process is a select group of highly interconnected liner companies that are able to sustain high freight rates via co-ordination, withdrawing and repositioning their ship capacities at will. Shifting the policy from allowing price co-ordination to allowing capacity co-ordination seems to have deteriorated rather than increased competition in liner shipping.”

The report calls for competition authorities around the world, including the Federal Maritime Commission in the USA and the European Commission’s Competition Directorate, to “limit the possibilities of joint capacity management in order to introduce more real competition between carriers”.

You can read the full article here: https://theloadstar.com/disruption-and-high-freight-rates-created-by-competition-authorities-says-itf/

For more information about Davies Turner’s ocean freight forwarding and logistics services, please contact ocean@daviesturner.co.uk or visit the relevant parts of this website.

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