The Federal Maritime Commission underestimated the magnitude of rate volatility in the Europe-Asia trade when it assessed the effects of the European Union’s repeal of carrier antitrust immunity, said the European Shippers’ Council.
The ESC said that rate volatility in trade lanes with China are influenced by an increased number of large vessels that cannot be shifted to other routes. They have caused greater competition for market share to fill the excess capacity.
Rate volatility also is influenced by the spot market in the Europe-Asia trades, said Jean-Louis Cambon, chairman of the ESC maritime transport council.
The FMC published its two-year study on the effects of rates after the EU abolished carriers’ block exemption to competition laws. The study found that the effect on the Europe-U.S. trade was minimal, overshadowed by the effect of the global recession of 2008.
The ESC said the FMC study left the impression that maintaining the regulatory status quo was the best option. However FMC officials said that the report emphasized facts, leaving policy decisions to Congress.
“Rather than staying with the status quo as implied by the FMC's report, we should be focusing on the encouragement of more liberalization with the removal of anti-trust block exemptions around the world, following Europe's lead,” Cambon said.