CALIFORNIA PORTS 2008 - Global Shippers’ Forum urges universal scrapping of anti-trust exemption for liner operatorsBy Leo Ryan, AJOTLeading shipper associations around the world, including the United States, have urged countries in Asia, North America and elsewhere to follow the example of European reforms by eliminating long-entrenched, anti-trust exemptions for liner conferences. The eradication of carrier block exemption from competition laws in the European Union takes effect on October 17. What amounted to a coordinated campaign against the continuing conference system dominated discussions at a three-day meeting in Montreal, which ended September 16, of the Global Shippers’ Forum (GSF). Present were top representatives from the National Industrial Transportation League, the Asian Shippers’ Council, the European Shippers’ Council, the Canadian Industrial Transportation Association (CITA), and the Japan Shippers’ Council as well as from shipper groups in Australia and Africa. “GSF members strongly believe that European reforms repealing liner block exemption as well as changes brought about in North America would provide comparable benefits for Asian countries, resulting in less influence by conferences and discussion agreements over rates,” the GSF stated in a joint declaration. In particular, the shipper groups urged China and India to apply their anti-trust laws to liner shipping. Referring to feasible, future introduction in Asia of market-based regulations, the GSF noted: “Competition between suppliers, rather than collusion, will result in efficiencies and customized services for their customers that are not possible where prices are determined by liner carriers in government-sanctioned cartels.” The GSF recognized that shippers and liner carriers, working together, “can achieve competitive and efficient relationships.” In an interview, John Lu, Chairman of the Asian Shippers’ Council, qualified the European initiative as “a victory for world trade that Asia should emulate.” The shipper associations “encouraged” the United States to undertake a comprehensive review of its own shipping laws to determine whether an antitrust exemption should continue to exist for liner carriers. These associations reiterated that “antitrust immunity as it relates to the ability of liner carriers to benchmark, discuss, set or fix rates, service terms and/or surcharges, is not necessary and should be terminated.” At a press conference, Bruce Carlton, NITL President and CEO, recalled that when the Ocean Shipping Reform Act of 1998 (OSRA) was enacted ten years ago, it was hailed as a major success for shippers in the US and abroad. “But a lot has happened since then in global trade and in regulatory perspectives everywhere. Topping the list is the European Union’s abolition of block exemption for liner shipping.” (While retaining carrier antitrust immunity, OSRA weakened the conference system by allowing confidential shipper-carrier contracts.) “Effectively, liner conferences have remained irrelevant after OSRA,” said Carlton, who also expressed the hope that US Congress, following the November elections, will soon “take a close view” at further changing US shipping legislation. He admitted, however, that the current financial crisis in the US only served to demonstrate that “a lot of other more pressing economic issues will top the agenda in a post-election Congress.” For its part, the Canadian government has been careful not to take a separate route from the US. The 2001 Shipping Conferences Exemption Act in Canada does not contain a sunset clause, as desired by Canadian shippers, which would have removed the anti-trust immunity within five years. “The competitive situation between US and Canadian ports rules out a go-it-alone approach by Canada,” said Bob Ballantyne, President of the Canadian Industrial Transportation Association. Other topics discussed at the GSF meeting included security issues, the mounting piracy incidents, the challeng