Asian shippers' groups take aim at US maritime sheriff

American industry veteran pledges to probe any 'proof' of collusion by container lines

PUBLISHED : Monday, 03 December, 2012, 12:00am
UPDATED : Monday, 03 December, 2012, 4:26am

Richard Lidinsky Jnr may not be public enemy No 1, but then again neither is the straight-talking, no-nonsense chairman of the US Federal Maritime Commission seen by Asian shippers' organisations as their best friend.

If the shipping industry veteran and now US maritime "policeman" is bothered by the low opinion in which he and the commission are held by Asian shippers, then he hides it well.

Lidinsky, who was in Hong Kong last week after a trip to Shanghai to meet Zhang Ye, president of the Shanghai Shipping Exchange, tries through the commission to balance the competing interests of shipping lines and shippers.

It is not an easy role given the sometimes hostile relationship between carriers and shippers as lines try to push through freight rate increases that are resisted by shippers who accuse the lines of poor service.

Asian shippers' groups are especially aggrieved at the commission's - read Lidinsky's - apparent failure to tackle what John Lu, chairman of the Asian Shippers' Council, contends is cartelist behaviour by container lines in setting freight rates, freight increases and surcharges.

These carriers, which include the Tung family-controlled company Orient Overseas Container Line and Cosco Container Lines, have antitrust immunity under US law.

Most of the transpacific container lines also belong to two industry discussion groups that are legally allowed to meet, exchange market information and develop voluntary, non-binding guidelines for rates and charges.

The Asian Shippers' Council, which represents shippers' groups, including those in Hong Kong and mainland China, thinks the carriers collude to fix rates rather than take guidance from the discussion groups.

Lidinsky's answer to the shippers' charge is simple. "Bring us proof … and we'll investigate," he declared.

He said the commission's consumer affairs and dispute-resolution services had "solved hundreds of complaints" from shippers and lines involving shipping contracts, including delayed shipment of consignments.

This came after a commission fact-finding mission in 2010 to look at shipper-container line relationships.

It followed extensive complaints by shippers that cargo was left on-dock and carriers demanded extra payments to carry cargo after a strong rebound in trade created a shortage of ships.

The commission's report put in place tighter monitoring and reporting controls on shipping lines.

But, much to the anger of shippers groups representing exporters and cargo owners, the report did not recommend an end to immunity.

Lidinsky said the commission was unable to take a position on whether antitrust immunity was right or wrong because it was a political issue and any changes had to be proposed in the US Congress.