Last reviewed 12 January 2022

The British International Freight Association (BIFA) has written to the UK Government asking it to investigate the state of competition within the current deep sea container shipping market.

Its members are, it points out, concerned that certain practices undertaken by the principal container shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade.

BIFA's Director General, Robert Keen, has written to Robert Courts, Parliamentary Under Secretary of State at the Department for Transport (DfT), expressing concern that, during a period of well-documented chaos within the container shipping sector, commercial power is becoming increasingly concentrate.

This is, he argues, resulting in diminished market choice and competition, and distorted market conditions.

“The facts speak for themselves,” Mr Keen suggests. “During a period that has seen EU block exemption regulations carried forward into UK law, there has been huge market consolidation.”

In 2015, there were 27 major container shipping lines carrying global containerised trade, with the largest having a 15.3% market share. Today, there are 15 shipping lines, organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40%.

A profit forecast has been made of more than US$150 billion for 2021 for the main container shipping lines for which financial results are available, Mr Keen notes. This is more than has been achieved in the previous 20 years combined.

BIFA is joining a growing number of organisations, including the US Federal Maritime Commission and the Australian Productivity Commission, in calling for governments to give careful consideration to the evolving business arrangements in the container shipping market to see whether they are in breach of competition law.