Monopoly fears in global market

Date: 09/11/00

THE presence of global container terminal operators is likely to improve productivity and cut transport costs for European exports and imports, but there are fears the newcomers will create monopolies.

Hutchison and the Rotterdam port management company abandoned a joint takeover of ECT last year after the European Commission expressed concerns about its impact on competition. They reconfigured the deal, only to be hit with a statement of objections in October.

Ports, like their shipping-line customers, are also consolidating, and raising additional fears about potential competition problems. Germany's two biggest seaports, fierce rivals Hamburg and Bremen-Bremerhaven, announced last week thatthey were seeking an alliance. This immediately prompted speculation about a merger between their top cargo handlers HHLA and BLG.

There is also concern that private companies are focusing on containers and ignoring other sectors such as bulk, conventional and short-sea traffic. "There are huge rigidities in systems and a complete lack of flexibility in most ports," said Emanuele Grimaldi, managing director of Grimaldi Group, a leading Italian line, at a recent conference in Valencia. "They have completely lost touch with reality, living in a non-competitive world, providing services in a monopolistic environment."

According to Alfons Guinier, secretary-general of the European Community Shipowners Associations, "ports are the focal point in the supply chain, but there are serious problems".