WSC slams consortia report as ‘riddled’ with flaws

Container carrier trade association says an OECD International Transport Forum report should be disregarded by European regulators looking at shipping regulation.

WSC slams consortia report as ‘riddled’ with flaws

Container carrier trade association says an OECD International Transport Forum report should be disregarded by European regulators looking at shipping regulation.

WSC slams consortia report as ‘riddled’ with flaws

Container carrier trade association says an OECD International Transport Forum report should be disregarded by European regulators looking at shipping regulation.

 

   The World Shipping Council on Monday blasted a report released last week by the International Transport Forum of the Organization for Economic Co-operation and Development as “riddled with fundamental flaws” and said it should be “disregarded in its entirety.”
    The paper, titled “Container Shipping in Europe Data for the Evaluation of the EU Consortia Block Exemption” claimed “container shipping has become more concentrated and vertically integrated and has slipped on various performance indicators related to trade lanes to and from Europe” and was issued as European regulators weigh whether to renew the consortia block exemption regulation (BER) next year. That regulation permits shipping companies to operate with vessel sharing arrangements (VSAs) under European antitrust law.
    WSC, the main trade association for the container shipping industry, says VSAs are beneficial, allowing carriers to operate larger, more efficient vessels and to offer shippers a wider range of services and more frequent service.
    In addition to the errors it alleges, WSC says it is not aware of either last week’s report or one produced by the ITF last November being submitted formally to the European Commission. If the EC should consider it, it “should be disregarded or given no more credence by the commission than any of the other contributions received from private citizens, and certainly no more credence than its manifest flaws allow.”

   Labeled a “working document” and given prominent play on the ITF website, WSC said nevertheless the report “merely reflects the subjective views of a single individual: Mr. Olaf Merk,” identified on the ITF websites as project manager for ports and shipping.
      WSC complains, for example, that one section of the report (Annex 1) combines data from two different sources and it is not clear how they have been combined.
    “Even without the ability to understand and verify the data presented in the report, it is obvious that the analysis is deficient,” says WSC. For example, it says there are market share estimates that in some cases are “so large that they become meaningless” or “in many cases far exceed 100 percent.”
    “No reliable conclusions can be drawn from data this far removed from reality,” says WSC.
    At another point the ITF report claims that “out of the 27 consortia identified (excluding alliances), only four fell with certainty below a market share of 30 percent. Seven exceeded the threshold with certainty” and “contrary to what stakeholders and regulators seem to believe, the majority of the consortia (22 out of 27) on trades to and from Europe most likely exceed the combined market share threshold.”
    WSC says, “It appears that these statements are based on the higher end of the market share ranges in Annex 1 and that the report is aggregating market shares of consortia in a manner which is expressly excluded by Article 5 of the BER.”
    For these reasons, WASC says, “no credibility can be given to these statements.”
    WSC suggests the commission should look to its own submission from December prepared by the firm RBB Economics for information on market shares.
    WSC also says an attempt by ITF to assess customer satisfaction is flawed.
    ITF references studies carried out by the European Shippers Council (ESC) and Drewry in 2017 and 2018 in an attempt to draw conclusions on customer satisfaction.
   “To the extent that this section of the report might be relevant to the evaluation, the commission must recognize its fatal flaw: The customers were apparently never asked the most important questions of all — would their satisfaction be higher if the BER were not renewed or if there were no consortia?
    “In addition to this fundamental failing, multiple other factors divest this section of the report of any potential value. For instance, the number of customers sampled was tiny compared to the total number of shippers worldwide; and the report provides no description of the methodology used in carrying out the studies.”

I would so argue that the rainy day is today for us. We’re in a critical situation where we’re facing catastrophic failures with our infrastructure.

Spot container rates from Shanghai to Rotterdam clocked in at $1,312 per FEU as of April 18, down from $1,431 per FEU four weeks prior, and down from $1,656 per FEU eight weeks prior, but still up 14 percent year-over-year, according to data from Drewry's WCI.

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WSC slams consortia report as ‘riddled’ with flaws

Container carrier trade association says an OECD International Transport Forum report should be disregarded by European regulators looking at shipping regulation.

Mar 25, 2019 on Dec 27, 2018AmericanShipper.com

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WSC slams consortia report as ‘riddled’ with flaws

Container carrier trade association says an OECD International Transport Forum report should be disregarded by European regulators looking at shipping regulation.

Mar 25, 2019 on Dec 27, 2018AmericanShipper.com