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New chair for the London Freight Club
Ian started IDT in 2006 having worked in the sector since 1985. He brings to the role a background of personal charitable activity which will no doubt enhance the good work undertaken by the London Freight Club. For more information visit www.londonfreightclub.com Ian is pictured with BIFA Executive Director Spencer Stevenson at a recent event.
Ian Davids of International Distribution & Transport Ltd (IDT) recently took over as Chair of the London Freight Club, a role delayed a year by the Covid pandemic.
Outcome of Member survey: Understa nding the Current Container Shipping Market
The main complaints raised by Members concerned shipping line service levels, including historically poor schedule reliability and lack of space. In the UK, there have been numerous complaints about lines being slow in creating records, releasing documents, etc, to the clearance freight forwarder. A total 81% of replies highlighted that even where the shipping line or its local representative made errors causing a delay, it still billed additional charges such as storage and demurrage. Members were particularly aggrieved at the unwillingness of shipping lines or their local representatives to accept the commercial consequences of their own mistakes. Regarding the general competition question, 94% of respondents believed that withdrawing or amending contract rates was anti- competitive. Furthermore, 89% of replies believed that the shipping lines were negatively impacting their ability to supply freight forwarding services, and a very significant 100% believed that shipping lines should be subject to a regulatory review in the UK. A significantly more detailed analysis was sent to the CMA with a request for a review of shipping line practices, but it is too early to know whether such an investigation will be conducted. If an investigation is launched, the CMA will undoubtedly require significant amounts of accurate data to be submitted, which will either prove or disprove whether there have been breaches of competition law.
The survey will ensure that BIFA, in co-operation with other trade associations, can ensure that forwarders’ concerns and grievances are aired and heard
BIFA would like to re-iterate its thanks to Members who completed the survey on the current Container Shipping Market. This has provided the trade association with a useful overview of Members’ experiences and thoughts on this subject. Also, there was one perhaps overlooked but intriguing outcome to which we will return later. The reason for the survey stemmed from Member concerns regarding two main issues: the withdrawal of contract rates from a significant number of Members by certain carriers and the reduction of the space available to others benefiting from contract rates. These actions led to numerous complaints from freight forwarders across the globe. BIFA has co- operated with other trade associations such as FIATA and CLECAT to ensure that forwarders’ concerns have been aired and heard. In the UK, BIFA engaged firstly with the Department for Transport and latterly with the Competition and Markets Authority (CMA) on the subject. International working group established The complexity of the issues are not to be under-estimated.
Zealand Commerce Commission. In the US, led by the Federal Maritime Commission, authorities have been particularly active in monitoring shipping line activities. At this point in time, it has to be stated that regulators have found no evidence of shipping lines breaking competition law in any jurisdiction. BIFA has written twice to the CMA regarding shipping line conduct, on the second occasion submitting the outcome of the survey.
Unexpected outcome The first and perhaps most
Shipping lines as carriers operate on a global basis, whilst in specific locales they are likely to be represented via a ship’s agent or logistics company, often with the parent company’s name. For regulators with limited territorial jurisdiction, co-operation is key and BIFA welcomed the establishment of a working group of international competition authorities that will meet to monitor potential anti-competitive conduct in the maritime sector The working group is made up of competition authorities from the ‘Five Eyes’ nations: the UK Competition and Markets Authority (CMA), the US Department of Justice, the Australian Competition and Consumer Commission, the Canadian Competition Bureau, and the New
important point to make is that 97% of all survey respondents classed themselves as either a small or medium-sized freight forwarder. The responses to the questionnaire produced an unexpected outcome – not as many Members were concerned about the withdrawal of contract rates and limiting of capacity as expected. A total 80% of French freight forwarders had raised concerns on this issue; however, amongst BIFA Members only 56% cited this complaint. Some commented that due to their size they had never benefited from ‘contract rates’, therefore this change in shipping line policy had no impact on them.
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June 2022
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