EU ETS: 'the polluter pays', but the price 'must be more transparent'
Shipping lines now paying EU ETS surcharges, under ‘the polluter pays’ principle, will pass these ...
Fiata has severely criticised the major shipping lines, accusing them of abusing their dominant position in the market and distorting competition.
In a punchy discussion paper published yesterday, the forwarder association outlined several key requirements to ensure a more level playing field in the market.
It said: “Access to the global logistics chain is under threat today. Moves by the world’s largest shipping lines, which, as part of the three global shipping alliances, dominate 80% of the global market, and 95% of the critical east-west tradelanes, have sought to cut or restrict freight forwarders from their services.”
Fiata called on industry stakeholders and market regulators to review the situation and ensure a balanced and fair system, and demanded a number of actions.
For starters, it said, the box lines should stop spending their newfound wealth – record-breaking profits that this year could reach $300bn, in a “protected environment” – on vertical integration and start contributing to decarbonisation.
It pointed out that to achieve the IMO’s goal of a 50% emissions cut by 2050, the cost would be some $1.5 trillion, “a significant challenge”. Instead of creating “unprecedented market concentration”, the lines should invest “to ensure that financial burden is not left to other parts of today’s ailing economy”.
“Fiata therefore calls on the IMO, governments and relevant organisations to put in place a plan for decarbonisation that takes account of this context and encourages such investments by shipping lines.”
Its second complaint concerns antitrust exemptions. Noting that these were intended to promote efficiency in the maritime supply chain, Fiata said that ,as the box lines had moved into areas “outside port-to-port activities”, they should be reviewed.
“They open the door for shipping lines to also use such exemptions in other activities – such as cargo handling, logistics and ancillary services – thus competing unfairly with the players active in those areas who do not have the benefit of exemption from antitrust law. This creates an oligopolistic market which undermines the overarching intent of the antitrust exemptions, and antitrust law overall.”
It added: “A more appropriate regulatory response would be to grant permissions, rather than exemptions, to shipping lines to deviate from antitrust law in certain prescribed situations. This would retain the regulatory intent, while allowing for certain criteria to be developed for such benefits to ensure they are not misused.”
Fiata also urged more work to be done on carbon offset markets, which it said was an intermediary step towards zero emissions, suggesting that the markets could be used as an incentive for lines to invest in decarbonisation.
And it called for the development of a data charter for digitalisation.
“Today, there are many different initiatives across the industry for the development of digital solutions. At the same time, it is important to ensure that this is effectively organised in a manner that does not inadvertently result in a data monopoly by certain actors holding the data, who can then utilise such data to compete unfairly in the supply chain.
“This is also important for ensuring that all actors across global supply chains will continue to have access to trade logistics, and do not risk being cut out of the system due to lack of resources or connectivity. Fiata continues to promote decentralised systems which do not privilege one single standard or type of system, but that, instead, are interoperable.”
Finally, it urged the industry – and the IMO in particular – to set up a platform for global collaboration between all supply chain stakeholders to facilitate a coordinated approach to problems.
“Currently, there is no one platform where dialogue and collaboration can be conducted on a consistent and formalised basis,” it said. “However, bottlenecks and disruptions in the supply chain are dependent on, and affect, matters that touch many different stakeholders.”
It concluded: “These major shipping lines are now abusing their dominant position in the market, together with regulatory anti-trust exemptions which are out of step with the current economic context, in a manner that is distorting free market competition, with detrimental impacts on the end consumer.
“Fiata continues to call on industry stakeholders and market regulators to take action to ensure a balanced and fair trading system.”