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Policy Consistency Plea To Aid Fair Market

The Federation of European Private Port Companies and Terminals (FEPORT) has called for policy consistency in a market where it says port stakeholders are being forced to compete for a shrinking customer base amidst continuing shipping consolidation.

Speaking about the International Transport Forum’s (ITF) report on ‘The Impact of Alliances in Container Shipping’, Gunther Bonz, president of FEPORT, said that the port industry has made a one-sided effort to adapt to container shipping alliances, while its profitability and return on investment has suffered.

“These last twenty years, on one side, regulatory framework has been encouraging consolidation and horizontal cooperation and on the other we, as port stakeholders, have been pushed to compete,” said Mr Bonz, who. “Fierce competition between large numbers of container terminals prevails for a customer base that is shrinking…Where is the consistency from national and EU regulators?”

Impact analysis

ITF’s report discusses the impacts of shipping alliances on competition and asks whether alliances bring benefits, and for whom. It notes that alliances “likely destroy value for ports, terminals and port services, by undermining their return on investment.”

Port dependence on alliances provides huge leverage for alliances to reduce rates and invest in additional infrastructure, said the report. This has frequently resulted in simultaneous overutilization and under-utilisation of terminals.

Alliances and consolidation have also contributed to the disappearance of smaller container ports and independent terminal operators, plus driven consolidation in the towage sector.

Mr Bonz said the ITF report is accurate about the “reality of the current developments in the cargo handling industry”

He added: “It is important to have data and good insights into the wider maritime sector because facts and figures will enable regulators to have a better appraisal of the impact of the regulatory frameworks they propose and adopt.”
Source: Port Strategy

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