Dr. Sebba: the end of the conference system will affect ocean freight rate stability

Dr. Yoram Sebba, Vice Chairman, Zim Integrated Shipping Services outlined on the second day of the "port2port International Logistics & Transportation Conference" the possible effects of the removal of the anti-trust immunity of ocean carrier conference systems.
 
During the 4th session of the conference which dealt with "Major global changes in shipping" Dr. Sebba tried to forecast the effects on Shipping lines without the conference system and to evaluate who stands to benefit from the end of the conference system? The Carriers or the Shippers?
 
He noted that the justification for the block exemption in essence assumes that conferences bring stability, ensuring exporters of reliable services which cannot be achieved otherwise.
 
The increasing significance of the global market has led to a growing concern about ocean shipping conferences. Shippers, according to Sebba, buoyed by growing trade volumes and weakened barriers, have been pressing for the abolition of conferences, assuming it will lead to lower freight rates.
 
Many carriers, on the other hand, report that the conference system is badly needed to stabilize rates and significantly invest in ships.
 
Sebba forecasted that third party companies will benefit from the new situation, rather than those who advocated and initiated it from the beginning. He noted that amongst the latter are also Shippers' councils.
 
Dr. Sebba concluded that a repeal of the block exemption will bring about substantial instability to the market. Freight rates will go up and down and the question must be asked whether the shipper really wants the proposed change.
 
He added that shippers are not fully aware of the various implications of the forthcoming change.