EU shippers contest TACA price accord

Date: 09/12/1999

By Renée Cordes

EU shippers are challenging the European Commission's decision to approve part of a recent agreement between a group of large container shipping lines regulating prices for land transport to ports.

The European Transport Users Council, which is more widely known as the European Shippers Council, has filed a complaint with the Court of First Instance in Luxembourg contesting one of the accord's provisions on the grounds that it violates EU competition rules.

In August, the Commission approved part of a revised agreement between a group of container shipping lines known as the Trans-Atlantic Conference Agreement (TACA), including a clause under which TACA members agreed not to charge less than the cost-price for land transport to ports.

The move was aimed at addressing complaints that the conference was stifling competition by ensuring that rivals which were not members of TACA could offer services at competitive prices and would not be shut out of the market.

But European shippers claim that it will do the opposite.

"Our fear is that if these provisions are allowed, it will essentially mean the same thing as allowing price fixing," said Chris Welsh, secretary-general of the European Shippers Council. "It is still a major restriction on competition."

The European Community Shipowners' Association insists, however, that the pricing rule will safeguard fair competition.

As the row over the pricing accord continues, TACA's eight members are still waiting for the Commission to deliver its verdict on the rest of the agreement, which was drawn up a year after competition officials fined several members of the conference a record total of more than €270 million for abusing their market powers.