Abstract
The most important development in the liner shipping industry last 10 years was the repeal of the block exemption that Liner freight conferences had received in the European Union (EU) with regard to price and capacity settings. From of 18 October 2008, former members of the Far East Freight Conference have had to establish their specific rates and freight additions, resulting in different rates and amounts applied across the board. This paper examines the general conditions of competition in a market economy, as well as special conditions for competition in the market for liner transportation, regarding descriptive analysis summarized the available information on the subject. The study is based on EU documents, official EU reviews, and paper of international researchers on the issue of current state and prospects of liner shipping market development. In particular, the history of the emergence and formation of linear conferences and overviews the European Union decision and impact of the repealing it’s block exemption from European competition law for Liner shipping conferences. As a result, the causes and implications were identified of these changes to liner container shipping industry.
Highlights
The concept of perfect competition looks like this: 1. significant depth of the market, i.е. the presence on the market of a large number of buyers and sellers, none of which can significantly affect the market, and the market is sufficiently liquid, so that it is capable of expanding business activity, and the growth in purchase and sale volumes has a slight effect on the price level; 2. services are available in any quantity, i.e. in any large or small, and are congenerous in quality, do not differ in their consumer value depending on the brand; Corresponding author: Oleksii Drozhzhyn E-mail: alexey.drozhzhyn@ukr.net
According to such reasons and other factors, which are underlined in this article, European Union (EU) announced the repeal of European Commission (EC) Regulation No 4056/86 on September 25, 2006, which provides «a block exemption from EU computational law for liner shipping conferences in EU trades. (Federal Maritime Commission, 2012)
In 1860, the first agreement was concluded between British shipowners servicing the Europe-Far East direction, and 15 years later the first shipping conference1 was established, already regulating the freight rates on the direction Great Britain-India (Calcutta)
Summary
Let's take a closer look at the factor that has been significantly developed in the market of liner transportation – at the conclusion of agreements that are aimed at the emergence of long-term relationships Such contracts between shipping lines are called line conferences, and between cargo owners – shippers' councils. It was argued that without collective freight rate and unrestrained competition would lead to the competition, which is “destructive” and occurs instability of prices and undesirable oligopoly (UNCTAD, 2016) According to such reasons and other factors, which are underlined in this article, European Union (EU) announced the repeal of EC Regulation No 4056/86 on September 25, 2006, which provides «a block exemption from EU computational law for liner shipping conferences in EU trades. It was announced the two-year transition period till October 18, 2008, before the repeal would take effect
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