Sat, Oct

Shippers’ councils


Shippers’ councils.  When liner conferences were formed they represented the ocean carriers and whether or not they exercised monopoly power, they still presented a negotiating group that had strong bargaining power.

If individual shippers require carriage of goods and if they are restricted to using the services of liner operators who are members of a conference, the imbalance in bargaining power can lead to unfair contractual terms and conditions. Individual shippers are constrained in their capacity to enter into contracts, which give them some benefits. For shippers to have some influence on the carriage of goods by sea, they must group in such a way as to be able to define their requirements and make these requirements known to the carriers meaningfully. Joint action with other shippers combines negotiating strength and consultative status when conferences and other carriers attempt to increase the freight rates. Combination also allows shippers to deal with government policy, regulations, industrial relations, and other non commercial matters with which individual shippers may experience difficulties.

There are shippers’ councils in many countries. The national shippers’ councils also amalgamate into regional councils. For example, the various European councils have combined into the “European Shippers’ Council”, a very powerful body that has had great influence not only on conference activities but perhaps also on national and international policy making. The operation of shippers’ councils depends on the government system under which they exist. In a shipping system in which government intervention and regulation is low, shippers can combine effectively to balance the bargaining strength of conferences and other groups of carriers. In socialist countries and other countries in which severe government regulations and intervention exists, there may be little advantage in having shippers’ councils.

The shippers’ council represents the shippers, the users of a service of carriage of goods, whether by sea or air or road or rail. The main objectives of a good shippers’ council are to obtain fair freight rates and adequate shipping services for its members. The objectives of a shippers’ council influence its activities, which include:

(a) The monitoring of freight rates and surcharges of carriers and conferences and the raising of objection, if such is warranted, against unfair increases;

(b) Educating, through publications, training courses, seminars, workshops and conferences, the staff of the member community about the business of shipping and the objectives of the shippers’ council;

(c) Publicising its activities widely through press releases, press conferences and media contact and thus presenting the shippers’ viewpoint to the general public who form the consumer base who will eventually have to pay for any unjustified freight rate increases by carriers;

(d)Sharing views with governments and port authorities in order to obtain the best advantages for its members in the various regulatory environments;

(e) Cooperating with other shippers’ councils to ensure that if their concerns are not fully addressed at national level, they may be able to enhance the treatment given to shippers at an international level because of the additional bargaining strength.

Shipowners and other carriers quickly exploit any weaknesses in approaches by shippers and if a shippers’ council is not truly representative of the main shipper base in a country or in a region, the conference and other carriers seize any evidence to reduce the strength of the council. Therefore a shippers’ council must be truly representative of its members. It should also be capable of conducting negotiations and consultations quickly, logically and efficiently in order to succeed in its objectives.

The United Nations Code of Conduct for Liner Conferences gives shippers some rights, but since 1983 (when the Code entered into force) these rights may no longer be adequate. In the Preamble of the Code it is stated that conferences should hold meaningful consultations with shippers’ organisations, shippers’ representatives and shippers on matters of common interest. The “shippers’ organisation” as defined is what is now called a “shippers’ council”. The Code seems to assume that in each country which is party to the Code there is a shippers’ council. If the Code were to be meaningful in the modern world, and it may not be with the developments that have taken place, especially the apparent waning of the concept of liner conferences, it would seem that a country without a shippers’ council would be unable to apply the Code.

A shippers’ council’s activities are quite different from those of a shippers’ association, although the former may be converted into the latter or exist alongside it.