Reform of liner regulations in the Asia-Pacific is set to take its first major step next year when the New Zealand government is expected to withdraw antitrust immunity from international shipping services.
“The government wants to get the legislation the best it can be,” Greg Steed, chairman of the New Zealand Shippers Council told The Journal of Commerce. “The difficult part is penalizing all rate-making behavior, but allowing operational cooperation among carriers that benefits everyone.
“The challenge is to accommodate both but not impose complicated processes on forming vessel sharing arrangements.”
Shippers groups have long been pushing for the end of liner exemptions from antitrust laws. This helped lead to their repeal in Europe in 2008 and to tighter regulation in the U.S. However, in the Asia-Pacific, most countries currently grant some form of relief or total immunity from antitrust laws to liner carriers.
The Asian Shippers’ Council said it is hopeful reform in New Zealand would encourage other governments in the region to follow suit.
In April, the New Zealand Productivity Commission submitted a report on international freight services to the New Zealand Parliament recommending the withdrawal of antitrust immunity for carriers. A transition of international shipping to a normal competition regime governed by New Zealand’s Commerce Act of 1986 was then recommended to Parliament by the country’s commerce minister in September. A bill has been drafted and is currently being examined by a draft committee.
“It’s fair to say the NZ government is taking its time to thoroughly examine the issues … now the holiday season is upon us. It is not likely that any law will come into effect until second quarter of 2013,” Steed said. “My opinion is that the exemption for rate-making agreements will be removed. It’s just how this is achieved while allowing operational agreements to occur with little bureaucracy in forming/altering them.”
Chris Welsh, Global Shippers’ Forum secretary general, said in his submission to the New Zealand Commerce Committee earlier this year that demands from lines for the continuation of exemptions from price fixing on the grounds that this is essential to ensuring stable and reliable services to New Zealand’s exporters and importers lacked credibility.
“Especially,” he added, “as the evidence, as conceded by the International Container Lines Committee, is that historic conference agreements no longer operate in New Zealand.”
The GSF submission also noted that not all collaborative agreements that do not involve pricing are good for the New Zealand economy as they can impact on price through capacity restrictions to support higher prices rather than to reduce prices by introducing efficiencies.
Steed said he was hopeful that lines would not significantly alter their services to Australasia if New Zealand pushed forward with the legislative change. “Carriers maintain that no discussions occur on rates, so any regulation outlawing it shouldn’t change anything,” he said. “There is the threat that carriers will pull out of New Zealand, but these threats are constant because we are at the end of a lot of services and so small in terms of volume.
“It’s worth noting that Australia has not indicated that it will change from their regime, which provides exemption from competition law in exchange for certain conditions.”
Contact Mike King at firstname.lastname@example.org.