Study of the 2008 Repeal of the Liner Conference Exemption From European Union Competition Law

Study of the 2008 Repeal of the Liner Conference Exemption From European Union Competition Law
Title:
Study of the 2008 Repeal of the Liner Conference Exemption From European Union Competition Law
Format:
Paperback
USA Price: 
$33.50
$8.38
Display Foreign Price
Stock:
Low stock
GPO Stock Number:
003-000-00693-0
ISBN:
9780160907852
Description

The Federal Maritime Commission (FMC) study was launched in response to concerns that the European Union's (EU's) repeal of the shipping liner conference block exemption might produce freight rate reductions in EU liner trades relative to U.S. liner trades. Seeking input on the issue from the shipping public, the FMC issued an EU Study Notice of Inquiry in November 2010. The primary issue addressed in the Federal Maritime Commission's multi-year study is: What impact has the repeal of the block exemption in Europe had on U.S. liner trades?

On September 25, 2006, the European Union (“EU”) announced the repeal of EC Regulation No. 4056/86, which provided a block exemption from EU competition law for liner shipping conferences in EU trades. It also announced a two-year transition period, until October 18, 2008, before the repeal would take effect. The decision to repeal the block exemption was based on the findings of a lengthy review initiated by the European Commission’s Directorate-General for Competition in March 2003.

As the expert, independent agency charged with regulating liner shipping in US trades, the Federal Maritime Commission (“Commission”) has a responsibility to keep abreast of changes in foreign laws and regulations, including the EU’s repeal, which might affect liner activities in US trades. To fulfill that responsibility, the Commission directed its Bureau of Trade Analysis (“Bureau”) to assess what impact the EU repeal might be having on shipping in US liner trades.

The Bureau embarked on this Study with the understanding that the global recession had a considerable impact on international trade in 2008–2009 and would present a major challenge to any effort to determine the impact of the EU repeal. To address that challenge, the Bureau focused the Study on the three main East/West liner trades and, in particular, a comparative assessment of two somewhat similar Asia-based trades – the Far East/United States trade and the Far East/North Europe trade.

The Study begins with an explanation of its origins; provides background on the Study’s EU and US legislative contexts; differentiates this Study from a number of relatively recent liner carrier antitrust reviews; and explains the analytical methods used. The heart of the Bureau’s research appears in Chapters Five and Six – the market analyses of the three major East/West trades and, in particular, the results of difference-in-differences estimations that compare the two largest of those trades. Chapter Seven presents the Study findings.

NOTE: NO FURTHER DISCOUNTS FOR ALREADY REDUCED SALE ITEMS.

Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . vii

The Core Issue vii

Research Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viii

Methods and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Chapter 1: Origin and Goals of the Study. . . . . . . . . . . . . . . 1

Chapter 2: Legislative Contexts and Recent Competition Reviews . . . . 5

OSRA’s Regulatory Reforms 5

EU Review of the Liner Conference Block Exemption 7

Recent Reviews of Liner Competition 12

How this Study Goes Beyond Recent Reviews 15

Chapter 3: Some Complicating Factors . . . . . . . . . . . . . . . . 17

Expected Impact of the EU Repeal . . . . . . . . . . . . . . . . . . . . . . .17

Exogenous Shock: The Global Recession 17

Chapter 4: Methods of Analysis . . . . . . . . . . . . . . . . . . . 21

Combining Multiple Approaches 21

Structure, Conduct and Performance 21

Comparative Evaluation: Difference-in-Differences Estimates 22

Notice of Inquiry Responses . . . . . . . . . . . . . . . . . . . . . . . . . .23

Chapter 5: Market Analyses of Three Trades . . . . . . . . . . . . . . 27

Introduction 27

North Europe/US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Background 28

Commentary 30

Transatlantic Market Structure . . . . . . . . . . . . . . . . . . . . . . . .34

Transatlantic Carrier Conduct . . . . . . . . . . . . . . . . . . . . . . . .67

Transatlantic Economic Performance 80

Far East/Europe 89

Background 89

Commentary 90

Asia/Europe Market Structure . . . . . . . . . . . . . . . . . . . . . . . .93

Asia/Europe Carrier Conduct . . . . . . . . . . . . . . . . . . . . . . . .123

Asia/Europe Economic Performance 136

Far East/US 140

Background 140

Discussion Agreements 143

Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146

Transpacific Market Structure 148

Transpacific Carrier Conduct 181

Transpacific Economic Performance . . . . . . . . . . . . . . . . . . . . .204

Chapter 6: Difference-in-Differences Analyses . . . . . . . . . . . . 209

Methodology 209

Analyzing the Impact of the Repeal 210

Steps Involved in DD Analysis 212

DD Estimates of the Impact of Repeal on Other Variables of Interest . . . . . . .213

General Observations on the DD Results . . . . . . . . . . . . . . . . . . . .215

KMI Study DD Estimates Compared . . . . . . . . . . . . . . . . . . . . . .216

Chapter 7: Findings . . . . . . . . . . . . . . . . . . . . . . . . 217

Complicating Factors 217

Primary Finding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217

Secondary Findings 219

Appendices

Appendix I: Notice of Inquiry 223

Appendix II: Rate Volatility Measures . . . . . . . . . . . . . . . . . . . . . .239

Appendix III: Observations on THC and BAF Surcharge Trends 247

Appendix IV: Liner Recession and Recovery, 2008-2010 261

Appendix V: Regulation of Ocean Carrier Agreements in the Transatlantic Trade 271

Appendix VI: Timeline of Events Relating to

Liner Shipping in the Transatlantic Trade 277

Appendix VII: Analysis of Service Contract Rates

in the Transatlantic Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . .291

Appendix VIII: Service Contract Rate Profiles

for the Major East-West Trades 295

Appendix IX: Difference-in-Differences Estimates and Data 301

Appendix X: An Empirical Analysis of EU’s Policy of

Abolishing the Liners’ Block Exemption

from Competition Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . .313

Appendix XI: Mergers and Acquisitions (Global) 315

Appendix XII: Slow Steaming Services in the

Major East-West Trades, December 2010 319

Appendix XIII: Slow Steaming Trends in the

Major East-West Trades, 2006 through 2010 . . . . . . . . . . . . . . . . . . .333

Appendix XIV: Glossary of Acronyms . . . . . . . . . . . . . . . . . . . . . .353

Audience

This publication would be of most use to members of the Federal Maritime Commission ("FMC" or "Commission"), which has ongoing interest in this issue; U.S. shippers; and policymakers and governmental agencies involved with U.S. shipping and freight rates, and the impact the repeal of the liner conference block exemption in Europe might have on U.S. liner trades, including economic impacts.

Product Details

Availability Details:
In Stock
USA Price:
$8.38
International Price:
$11.73
Publisher:
Federal Maritime Commission, Bureau of Trade Analysis
Notes:
Although this book has an 003 stock number stem, it is a Federal Maritime Commission publication.
Key Phrases:
  • Competition Law
  • Liner Conference Exemption
Weight:
2.625
Quantity Price:
Discount
Cover:
Paper
Unit of Issue (US):
1
Unit of Issue (Non-US):
1
Record Creation Date:
03/12/2012
Last Status Update:
01/03/2019
Back to Top