GSF Calls for Rigorous Monitoring of Shipping Alliances’ KPIs
The Global Shippers Forum (GSF) has called for rigorous monitoring of key performance indicators (KPIs) that can provide the required level of confidence to customers that ocean shipping alliances can deliver tangible benefits in terms of reduced costs, competitive ocean rates and improved services for shippers.
Speaking at the ‘Transport Week Conference’ in Gdansk, Poland, Chris Welsh, GSF Secretary General, outlined the need for shipping alliances to reach out to customers and start showing demonstrable improvements in service quality and innovative solutions for shippers.
According to him, the necessary first step would be to sort out the current lack of reliability and predictability of their joint operations which is adversely affecting shippers’ maritime and logistics supply chains.
“Such confidence building measures are necessary in view of the concentrated market power of the four main alliances covering the world’s main trade lanes and smaller niche and regional liner markets which are directly or indirectly impacted by the alliances. That confidence and trust will be withheld so long as alliance members continue to discuss, fix or agree rates or rate guidelines in conference or discussion agreements, such as the Transpacific and Inter-Asia discussion agreements,” Welsh said.
The UK-based GSF said the new alliance agreements represent a new breed of enhanced co-operation agreements in the liner shipping sector that go well beyond traditional consortia or vessel sharing agreements.
According to GSF, while alliance members are competing with each other for cargo and market share, they have established mechanisms for sharing strategic information on costs, future capacity investment decisions, trade lane capacity deployment, port and terminal operations, and potentially even prices and surcharges in the context of conference and discussion agreements.
Welsh added that alliance lines leadership should pull out of all conference and discussion agreements to give assurance that the exchange of sensitive information, including pricing information, on a regular basis within alliances does not lead to abuses of their market power.
“The GSF therefore calls on the EU, US, and Chinese regulatory and competition authorities to share monitoring data and information to prevent potential competition abuses in the interests of shippers and consumers,”Welsh stressed.
