Competition Directorate News

The container shipping industry is faced with the challenge of ever-decreasing freight rates that can only be served viably with larger, more efficient vessels. This problem is worsened by the industry’s average financial performance which does not generate the returns to invest in this new capacity without considerable financial risk. There are only two alternatives: either an all-out battle for market share in the hope that several lines simply abandon a particular trade or even exit the market completely allowing the surviving lines to capture the volumes freed up by these departing lines, or collaboration with other lines to allow more efficient and rational capacity utilisation.

International Chamber of Shipping (ICS) welcomes halt to European Commission (EC) probe on P&I clubs. International Chamber of Shipping (ICS), which represents over 80% of the world merchant fleet, has welcomed the decision by the European Commission competition directorate to close its investigation into the activities of the International Group of P&I Clubs. ICS director of legal affairs , Kiran Khosla said: "ICS has always firmly stated that the current system of mutual third party liability insurance provided by the International Group continues to serve the best interests of ship operators and their customers extremely well, alongside serving the interests of claimants and the general public.

The International Chamber of Shipping (ICS), which represents over 80% of the world merchant fleet, has welcomed the decision by the European Commission competition directorate to close its investigation into the activities of the International Group of P&I Clubs. “ICS has always firmly stated that the current system of mutual third party liability insurance provided by the International Group continues to serve the best interests of ship operators and their customers extremely well, alongside serving the interests of claimants and the general public.

The European Commission (EC) Competition Directorate released a recent speech given by Joos Stragier, Head of the Transport Unit, DG Competition, regarding review of the EU Competition Regulation for Maritime Transport. The speech indicates that the Competition Directorate will expect strong evidence to be provided by the liner companies serving the EU in order to justify renewing the current competition exemption provided to this industry. In a related Consultation Document, the Directorate discusses the current consortia block exemption and issues to be addressed in the renewal process. A Discussion Paper lays out in detail the background of the block exemption and legal issues related thereto.

Stolt-Nielsen Transportation Group ), a wholly-owned subsidiary of Stolt-Nielsen S.A. reported that the European Commission's Competition Directorate has informed SNTG that the Competition Directorate has closed its investigation into possible collusive behavior in the intra- European inland barge industry. The European Commission's investigation of possible collusive activities in respect of deep-sea parcel tanker operations continues to be ongoing. In February 2003, SNTG announced it had been granted conditional immunity from imposition of fines by the European Commission with respect to both the deep-sea parcel tanker and intra-European inland barge operations.

The following are remards by the Honorable Harold J. Creel, Jr., Federal Maritime Commisioner, as prepared for presentation at the International Transportation Management Conference in Houston. It is an honor and a pleasure to be addressing this distinguished conference. As Barry indicated in his opening remarks, this panel will be addressing the following hot topics in ocean transportation: globalization; deregulation; terrorism; new security requirements; antitrust immunity; and NVOCC confidential contracts. I would like to focus my remarks, from a government regulator's perspective, on the latter two topics. I will, of course, attempt to answer any questions you may have on anything that comes up.

TUI AG and CP Ships Limited jointly announced that TUI's proposed acquisition of CP Ships has been cleared by the European Union and that the regulatory review period in China has expired. Regulatory approvals under competition legislation in certain other countries in which the companies carry on business are pending. The EU approval granted by the European Commission's competition directorate, is contingent upon the withdrawal by TUI's Hapag-Lloyd from two agreements, the Transatlantic Conference Agreement (TACA) and the US South Europe Conference (USSEC). TUI intends to combine Hapag-Lloyd and CP Ships to create the world's fifth-largest container shipping company. TUI anticipates completion of its offer in October, 2005.