The Hindu Business Line : Shippers' council re-starts voyage

If the report doing the rounds is any indication, the All India Shippers Council (AISC), the apex body of the various regional shippers' associations, is set to come back into action after being all but dormant for nearly 20 years.

The credit for galvanising AISC should go to Mr Ravindra Ratnapala, former Chairman of Sri Lanka Shippers Council and Association of Shippers Councils of Bangladesh, India, Pakistan and Sri Lanka (ASCOBIPS) and immediate past convenor of ASCOBIPS in Asian Shippers Council (ASC)into action. On a recent visit to India, he met the AISC chairman and mooted proposals that were difficult to ignore.

More responsibility

First, the AISC chief was urged to take over as the President of ASCOBIPS and, then, he was told that he may have to consider taking over as the President of Asian Shippers Council (ASC) also. The result: AISC, as has been reported, plans to hold the meeting of ASCOBIPS in Mumbai some time in May to expedite the process.

Bangladesh is the current Chairman of ASCOBIPS. Its term expired last year but the country continues as head, mainly because India, which should have taken over, showed no interest. This is no surprise considering the AISC's role in past few years. The AISC's attitude also infected the regional shippers' associations within the country, with some of the them, particularly those based in Chennai and Kochi, reduced to virtual non-entities.

Interestingly, world wide shippers movement is gaining momentum. A Global Shippers' Forum (GSF) has been formed with the participation of the US-based National Industrial Transportation League, the European Shippers Council (ESC) and the ASC. It is now felt that the present Chairman of ASC, also the Chairman of Singapore National Shippers Association, may be called to play a more active role in the international scene. The matter is to come up for discussion at the meeting of the GSF in Brussels early next month. India, it is felt, should take lead to spearhead shippers movement not only within the country but also the entire region.

There can be no two opinions about the need to strengthen shippers' movement in the region and for India to take the lead in this.

Changes in regulations

For years, the shippers have been lobbying for changes in maritime regulations that are weighed heavily in favour of liner shipping companies. Now, shipping companies not only collectively set rates and service conditions, they would even refuse to entertain any request from shippers to hold any discussion even if the rates are arbitrary and unsubstantiated and services far from satisfactory. The smaller shippers and the less powerful economic regions are particularly hit. They have nowhere to redress their grievances, no matter how genuine the grievances are.

Some shipping lines, through mergers and acquisitions, are really emerging very strong, so much so that even large shippers will find it difficult not to abide by the terms dictated by these lines, especially because some of them even control port operations through acquisitions of stakes in container terminals. Take the case of the THC that has been a bone of contention between the shippers and the shipping lines ever since its introduction in Asia in 1991. Asian shippers have fought for their removal as the THC has proved to be an extra burden, over and above the freight rate.

The effort has not been in vain entirely. For example, in Indonesia, the THC has been reduced while in China, the Chinese Government has announced the conclusion of its investigation into the issue, stating that the THC is an integral part of the freight and that all costs must be included in the freight. Surcharge should be temporary and repealed when normalcy returns. A simplified freight tariff finalised after due consultations will mean less confusion and fewer disputes and pave the way for improved shipper-carrier relationships.

Ground Reality

Unfortunately, the ground reality is different, not only in Asia but also in the West. In September 2006, at the insistence of the European Shippers Council, the European Union Competitiveness Committee announced the repeal of the block exemptions granted to liner conferences, which shall take effect in October 2008. The Federation of ASEAN Shippers' Council (FASC) and the ASC have commended the ESC for its resolve in pressing for a change in maritime regulatory regime and the European Commission (EC) for making a bold decision to change a century old practice. The EC decision, though applicable to liner trades to and from the EU, is expected to usher in a new dawn for both shippers and shipping lines, prompting the other governments to review and come up with the needed reforms in the liner shipping.

The various shippers' organisations in different parts of the country therefore seek immediate action from their governments to implement competitive/regulatory framework to eliminate anti-competitive practices by liner conferences and to protect the trade. In such a situation, India cannot and should remain a mute spectator.

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