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Shippers to review carrier performance

New quarterly report from Global Shippers’ Forum and MDS Transmodal is designed to boost the shipper case when the consortia block exemption is next debated.

The Global Shippers’ Forum has joined forces with logistics research consultancy MDS Transmodal in an effort to develop a data set to inform the debate regarding the consortia block exemption regulation.

Earlier this year, the European Commission extended the consortia block exemption for another four years, granting container lines freedom from the bloc’s competition regulation as long as they do not collude on prices, restrict capacity except to match demand, or allocate markets and customers between each other.

“The commission kicked the can down the road for another four years, largely because of a lack of decent evidence,” MDST chairman Mike Garratt told Lloyd’s List in an interview.

“It seemed to us there was an opportunity to bring together all the data on supply, demand, rates and performance for the first time to inform the debate on BER.”

GSF secretary-general James Hookham added that the shipper community wanted to be in a better position to respond to the commission when the block exemption is revisited in 2024.

“We took a lot of learnings from the way the commission chose to consult and reach its views,” he said. “Assuming it will take a similar course next time, we want to be in a better position to inform that decision.”

The GSF had always adopted an evidence-based approach, he said, but it needed to be in a position where all stakeholders accepted the legitimacy of the information.

By utilising MDST as an “honest broker”, GSF hopes to be able to inform future decisions.

“I’m confident we’ve found the core set of indicators that will explain what is going on and as the data set builds we will be able to join the dots,” Mr Hookham said. “The way to understand the market is to look at the way each of the indicators varies due to some of the others.”

The Container Shipping Market Quarterly Review will be produced every three months and will report, interpret and comment on trends and developments in the container shipping market that affect shippers.

MDST and the GSF have generated eight new indicators that show how the market is performing in terms that are relevant and applicable to shippers as users and customers of container lines.

While the data is publicly available in its own terms, MDST and the GSF say this is the first time it has been brought together in a form that addresses shipper concerns.

“The global economy depends very heavily upon the effective connectivity, capacity, reliability and cost effectiveness of the container industry,” Mr Garratt said.

“This quarterly review seeks to bring together and analyse supply, demand, performance and economic data that uses common coding definitions to facilitate cross referencing to provide a coherent description of this industry.”

Mr Hookham said it would also help to explain the current disruptions in the container shipping sector, that had seen soaring freight rates and disruptions at terminals.

“With everything that has happened this year we think we have the data to understand the wider behaviour of the container shipping market,” he said.

“It has come as an early test of our conclusions, because the market is not in a steady state. We believe we can show this is attributable to a better rate of utilisation of available capacity. In order to sustain those high rates, supply must have lagged demand to create the crunch. If supply matches demand, what is stopping the prices fall?”

Source: Lloyds Loading List

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