LINES' BID TO END BRUSSELS FIGHT HITS SNAG TACA GOING BACK TO COURT

LINES' BID TO END BRUSSELS FIGHT HITS SNAG TACA GOING BACK TO COURT

Red tape in Brussels has tripped up an attempt by container shipping lines

from around the world to resolve their bitter fight with the European

Commission and shippers over multimodal freight rates.

The Intra-industry Multimodal Committee, an informal group set up last year by carriers to examine ways of reorganizing intermodal practices in Europe, has been ordered to file an official notification of its agreement to the European Commission. In the meantime, the committee is unable to proceed with its task of seeking some practical solutions to the dispute.Meanwhile, North Atlantic carriers will be back in court next week in a bid to prevent the European Commission from imposing fines on lines that collectively set inland freight rates.

The 16 members of the Trans-Atlantic Conference Agreement will ask the Court of First Instance in Luxembourg to stop the European Commission from removing shipping lines' antitrust immunity until the legality of that proposition has been examined by the higher European Court.

LONG STORY GETS NEW TWIST

This is the latest twist in the long-running saga of whether conference lines that charge the same ocean freight rates can also jointly fix inland freight rates. It follows a threat by the European Union's competition commissioner, Karel Van Miert, to fine shipping lines before legal appeals are heard.

Both members of TACA and the Far Eastern Freight Conference have asked the European Court to overrule the commission's decision that inland rate-setting is unlawful, but the cases may not get to court for another year or longer.

In the meantime, TACA lawyers were unable to obtain a reassurance last month from officials at the competition directorate, DG IV, that fines would not be imposed until legal proceedings had been concluded. When DG IV failed to respond to the request, TACA lawyers applied to the Court of First Instance for an interim injunction protecting lines from fines. A hearing was set for Oct. 18.

KEEPING CUSTOMERS HAPPY

With the legal fight plodding on, shipping lines had hoped to find some way of pacifying their customers through market-based solutions.

Senior executives from Maersk Line, Nippon Yusen Kaisha (NYK Line), Sea- Land Service Inc., P&O Containers, Hapag-Lloyd and Nedlloyd Lines were appointed to a core group within the Intra-industry Multimodal Committee and given the task of consulting with both the European Commission and shippers in an effort to defuse hostilities and find a common way forward.

The need to file an official notification of the IMC to Brussels will only

serve to delay any solution to the dispute that already has dragged on for many years, said Paul Bijvoets, chairman of the IMC and also chief executive of Nedlloyd Lines and chairman of the FEFC.

If, after examining the terms of the agreement, Brussels issues a formal objection to the IMC, "then I give up," Mr. Bijvoets said Friday.

In parallel with the IMC initiative, Mr. Van Miert last month assembled another committee, comprising European exporters and shipping lines, to examine the argument and propose some solutions.

SHIPPERS NOT PLEASED

Meanwhile, European shippers are not happy about the fact that shipping lines could be allowed to retain multimodal rate-making authority under certain circumstances. Mr. Van Miert already has indicated that shipping lines may be able to continue setting freight rates collectively if they agree to cooperate on inland transport services to the benefit of shippers.

What he objects to is a common freight rate by shipping lines that organize their road, rail or barge services independently. This means, for example, that huge numbers of empty containers have to be moved around Europe.

Shippers, for their part, want door-to-door transport services, Henrik Baasch, secretary general of the European Shippers' Councils, said Friday. Speaking at the European Maritime Law Organization conference, he said that the objection is to common pricing by conference lines, not intermodal freight services.

"But it is not appropriate for Brussels to grant carriers the privilege of fixing prices together in return for cooperation on inland transport services," Mr. Baasch said.