BIFA calls for investigation into box shipping market, alleging market distortion

“The facts speak for themselves. During a period that has seen EU block exemption regulations carried forward into UK law, there has been huge market consolidation.”

Since the beginning of the coronavirus pandemic in 2020, an increasing numbers of consumers have turned to buying goods online and postponed spending on services, causing a shift in global supply chains.

Companies moving goods by traditional sea, rail, road and air routes saw increased freight rates with shipping in particular reaching record levels with high rates. 80% of the world’s container capacity is controlled by three large container ship alliances and Mr Keen said the pandemic’s impact accelerated the consolidation with carriers allocating vessels to the most profitable routes, disregarding the needs of their customers.

He said, “Today, there are 15 shipping lines, organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40%.”

A recent Drewry Shipping Consultant report highlighted carriers’ combined profits over the past year is in excess of US$150Bn. Mr Keen said “To put that into perspective, this is more than has been achieved in the previous 20 years combined, which many BIFA members consider to be a case of blatant profiteering.”

BIFA is not alone in its concerns. In the US, shippers and the White House itself have called on the Federal Maritime Commission (FMC) to mediate similar issues. And the US House of Representatives passed the Ocean Shipping Reform Act of 2021 which has provisions to bestow the FMC with oversight powers extending to cargo capacity decisions.