BIFA cites ‘huge market consolidation’ needing investigation
Rates for air and ocean freight have more than tripled
The British International Freight Association is calling on the U.K. government to investigate the state of competition within the global container-shipping market, as transportation costs remain elevated heading into the third year of the pandemic.
The lobby group, which represents freight-forwarding and logistics firms, said its members are concerned that certain practices and exemptions provided to shipping firms are leading to “distorted market conditions.”
In a letter to Robert Courts, the parliamentary under secretary of state at the Department for Transport, BIFA Director General Robert Keen said that during a period of chaos in the sector, commercial power has becoming increasingly concentrated under European Union oversight that allows the companies to operate in alliances without violating antitrust rules.
“During a period that has seen EU block exemption regulations carried forward into U.K. law, there has been huge market consolidation,” the letter stated.
Since early 2020, the coronavirus has led increasing numbers of shoppers to turn to buying goods online and postpone spending on services. That’s thrown global supply chains off balance and disrupted the companies that move goods by air, sea, rail and roads. Freight rates for air and ocean delivery have more than tripled.
Big Three on the Oceans
A trio of alliances controls about 80% of the world’s shipping container capacity, measured here in millions of TEUs
The U.K. has faced its own set of issues tied to Brexit, with freight firms raising prices to reflect the increased cost of sending items to the country.
The shipping lines are benefiting from all the disruptions, said BIFA, with a recent forecast from Drewry suggesting that the main container carriers made more than $150 billion in profit in 2021. That’s more than the previous 20 years combined, the group said, calling it “a case of blatant profiteering.”
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