ESC: Shipping Alliances Lead to Market Convergence

The increased collaboration between the French container ship operator CMA CGM and Germany’s Hamburg Süd will bring the container liner market one step closer to total convergence, the European Shippers’ Council warns.

This will reinforce the risk of reducing service quality and sailing frequency as well as free choice for manufacturers and retailers, as well as enhancing prices, according to the ESC.

The latest vessel pooling is not a surprise as it comes following another agreement between UASC and Hamburg Süd. 

According to the ESC, this new global partnership underlines the fact that the maritime liner competition should be seen from a global perspective and not at regional level.

Uniform process and analysis framework should be developed by competition authorities to deal with this new paradigm. Looking at alliances through the wrong end of the telescope will not allow authorities to understand properly the market dynamics, the ESC argues.

The ESC urges national competition authorities to agree between themselves on a certain number of competitive sensitive data that could be monitored.

Operational and juridical links between ship owners, correlation between price modification and capacity modification should be part of data monitored, among others.

By having these data monitored, competition authorities will switch from a curing stance to a more preventing mood which is far better for economic activities.

Image: Hamburg Süd