The British International Freight Association (BIFA) has called for the UK government to investigate the state of competition in the deep-sea container market.

The UK association for freight forwarding and logistics companies said its members were “concerned that certain practices undertaken by the principal container shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade.”

In a letter to UK shipping minister Robert Courts MP, BIFA Director General Robert Keen expressed his concerns that commercial power in the container shipping sector had become concentrated to the detriment of competition, market choice and overall market conditions.

Keen said: “BIFA members fully accept that a free-market economy is open to all, but are increasingly concerned that the activities of the container shipping lines, and the exemptions from legislation from which they benefit, are distorting the operations of that market to the shipping lines’ advantage, whilst adversely and unfairly affecting their customers, especially freight forwarders and SME businesses.”

Keen cited the drop from 27 major shipping lines in 2015 with a 15.3% market share to 15 shipping lines today and market shares up to 40% on some trades for container alliances.

Container lines are reaping record profits at a time of extremely high rates and low service levels.

Drewry’s $150bn profit forecast for the major container lines “is more than has been achieved in the previous 20 years combined, and many BIFA members consider it to be a case of blatant profiteering,” said Keen.

BIFA’s call for investigation into the container trades and competition laws adds to others around the world from European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT), International Federation of Freight Forwarders Associations (FIATA), the US Federal Maritime Commission, and the Australian Productivity Commission.

Source: Seatrade Maritime News