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Forging a cohesive shippers' voice

The OECD regulatory reform looking into the removal of the liner industry's historic antitrust immunity provisions is one of the major issues shippers' councils are involved with collectively, as the Tripartite Shippers' Group (TSG). Willy Lin, Chairman of the Hong Kong Shippers' Council, spoke before executives of the shipping industry at the Lloyd's List Container Shipping-Executive Summit III held in Hong Kong late last year. The TSG comprises the shippers' councils of Canada, the US, Europe, Japan, Korea, Hong Kong, the Philippines, Thailand, Singapore and ASEAN.

At the September Yokohama meeting, the TSG declared jointly that as an integral component of the world freight transportation system, interactive cooperation and communication are essential elements in advancing both shipper-supported principles and shipper/carrier relationships. "As a general principle, we agree as a group that a free and competitive liner operating environment is preferable to one governed by artificial antitrust protections administered by national governments," said Lin.

Willy Lin (left), Chairman of the Hong Kong Shippers' Council, addresses executives of the industry at the Lloyd's List Container Shipping-Executive Summit III

"The Tripartite Shippers' Group recognizes that transparency of contract provisions permits enforcement of collective activities among carriers and inhibits the operation of a consumer-responsive, innovative and market driven transportation environment. Accomplishment towards this goal should be viewed as not only beneficial to the shipper community but as building blocks from which new relationships may be forged with transportation providers," said Lin. "To help achieve these results, the Tripartite Shippers' Group has agreed that we would speak with one coordinated voice in regard to the Organization for Economic Cooperation and Development's (OECD) current review into the effects of common pricing and the impact of discussion and stabilization agreements on shippers and shipowners."

On the issue of ocean carrier liability, Lin said that existing international maritime liability rules-the Hague Rules that were passed in 1924 as an international convention, and the Hague Visby amendments-have been under reform since the mid '80s. Although service contracts have lessened the importance of such liability conventions and permit contracting parties to formulate their own liability terms, the international regimes and subsequent national laws on which they are based do provide a platform from which these terms are negotiated.

"Although most of the world operates under a more modern Hague-Visby regime, there are still countries, like the US, that still adhere to the older Hague rules under the US law known as the Carriage of Goods By Sea Act. The European Shippers' Council, on the other hand, supports the adoption of the Hamburg Rules although the Hamburg Rules are There are coalitions for reform of these rules, including ongoing efforts within the ICC, and other international groups under the United Nations, and the Comite Maritime International (CMI).

"Why is cargo liability reform important for shippers? Shipowners have argued that the so-called 'network' liability system continues to serve shippers well and that there is no need to reform a system that has been used for so long. Shippers today have global or comprehensive cargo liability insurance policies to cover risks. Shippers often take the line of least resistance by taking out insurance cover for loss or damage to goods in transit. The European Commission estimates that this arrangement costs shippers millions, if not billions, of ECU annually. The current liability system is therefore considered wasteful and inefficient," explained Lin.