The Global Shippers Forum proposes a more accurate indicator to assess the degree of concentration of the containerized shipping market



The Global Shippers Forum, the international organisation to which the freight forwarding associations of more than 25 nations head, believes that the current competitiveness indicators used to assess the degree of competition in the world sector of the liner shipping is incomplete and therefore inaccurate and, according to the GSF, would not take full account of the degree of cooperation between containerized maritime carriers which-the organisation denounced-translates into a sector rather than concentrated to grave disceration of shippers from all over the world.

With reference to the results of the latest review of the containerized shipping market processed by the MDS Transmodal consultancy in collaboration with the GSF, the Global Shippers Forum has therefore presented an indicator modified based on alternative indicators suggested by a recent study ("Alternative approaches to measuring concentration in liner shipping", Olaf Merk (ITF) and Antonella Teodoro (MDS Transmodal), Maritime Economics & Logistics, 2022) which-per-notice of the GSF-better reflect the degree of cooperation between the shipping companies containerized not only as part of the three major alliances between these carriers, but also through agreements under which the companies belonging to different alliances operate services in a shared manner.

"So Far the competition authorities have so far implicitly referred to the analysis of this market conducted by the European Commission and the US Federal Maritime Commission-they have relied on traditional instruments," the report said. incomplete to assess the level of concentration in traffics, in particular at the Herfindahl-Hirschman Index (HHI). However, this indicator does not take into account the overall scope of cooperation between the shipping companies allowed by the exemption by category and other provisions on antitrust immunity. When these inter-alliances are included-the Global Shippers Forum-the concentration of the market, as measured by the modified HHI, is much higher. "

The Global Shippers Forum, based on these considerations, found that in its view the recent "Fact Finding Investigation 29-Final Report", which was published by the Federal Maritime Commission and absolves shipping companies from having conducted practices that would have resulted in a concentration of the market ( of the 1 ° June 2022), "does not yet provide a complete picture, as the report argues that the liner trades serving the United States can be assessed as highlighting a" sustained competition " as their HHI has been calculated below of 2,500 points ", which is the threshold beyond which a sector is deemed" highly concentrated " by most antitrust authorities.

The Global Shippers Forum has therefore called on the US FMC and other competition authorities to use the MHHI indicator that the association believes it is more accurate to assess concentrations within the market of the containerized maritime transport. "This revolutionary analysis reveals the degree of dominance that many shipping companies have on the main global traffic routes," GSF Director James Hookham said in a statement. The current market concentration indicators see only one part of the picture. Not only are there consortium operations under the three main alliances, but the number of existing stand-alone consortia that consist of companies of different alliances is also significant. "