Home » Breaking News, Maritime » European exporters assail ‘unexplained’ capacity crunch

The European Shippers’ Council (ESC) has expressed concern about the capacity crunch in liner shipping and the way ship owners are handling it.

In a recent press release, the ESC said that with the current capacity shortfall, goods to be exported from Europe have been waiting for up to eight weeks to be loaded on ships.

“The present capacity is insufficient to take all shipments. In addition, carriers provide no guarantee whatsoever that all goods of a shipment will be loaded. Frequently some goods from a shipment remain in the port. At the same time spot market freight-tariffs are increasing,” the council said.

“These developments are forcing many traders to cancel their existing sales contracts and limit further sales. For ESC this is a reason to worry about European exports and the negative consequences for the competitiveness of European economy.”

An ESC emergency meeting was held late March to discuss the situation, but the meeting was unable to provide an instant answer, said the statement.

To solve the problem, ESC said it is asking the shipping industry, “Is the present situation a natural result of the market adjusting to capacity changes in the maritime sector, or is it an artificially created scenario by certain shipping lines, to increase their profitability? How long will it last?”

The ESC noted that the first signals of a market disturbance were already perceived last November with an increase in blank sailings. “No shipper has been invited to discuss the present market situation, or consulted in any way about the balance between shipments and capacity.”

Following the ESC emergency meeting, the ESC board of directors decided to set up a temporary observer group composed of representatives of European exporters to monitor the situation closely.

“They will analyse the changes in capacity, the time of delays, and the fluctuation of rates. The data collected will be used to decide on possible next steps. ESC will be regularly informing press and competent authorities of intermediate and final results of this exercise. ESC will meet DG Competition [Directorate-General for Competition of the European Commission] in the early summertime to give them an informed view on the present crisis and discuss strategies to prevent this from happening again in future.”

Photo: Dirtsc

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