The adoption of a decision that renders legally binding the commitments offered by fourteen container shipping companies, which brings more transparency to the maritime transport of containers price politics, “does not solve” the price fixing problem, according to the European Shippers’ Council (ESC).
The decision, adopted by the European Commission on July 7, makes legally binding the commitments which were placed in order to increase price transparency and to reduce the likelihood of coordinating prices, as well as to stop the current inquiry made by the Commission about competition breach within container transport sector.
“The liner operator practice of announcing GRIs may have harmed competition and shipper’s interests. In these commitments, the carriers proposed a new model of announcements. They will stop using GRIs, but will announce freight rates that include at least the five main elements of the total price,” ESC said, adding that the price announcements would be considered as maximum prices for the declared period of validity and would not be made more than 31 days before their entry into force.
The purpose of this pledge is, according to the EC, “to increase the committal value of the parties involved, especially to the customers.”
“However, this increased committal value does not take away shippers’ serious concern that the new model may allow the parties to explore each other’s pricing intentions and to coordinate their behaviour,” ESC said.
The new model still enables the liner operators to test their new price policy without incurring the risk of losing customers and monitor whether or not they can reasonably implement this new price level. It also provides the operators with the ability to reduce strategic uncertainty and reduce the risk for losing competitiveness in the market, according to ESC.