Commission takes shipping on board

Date: 30/01/1997

By Bruce Barnard

THE EU's shipping industry has a love-hate relationship with Brussels, with Transport Commissioner Neil Kinnock playing the hero and Competition Commissioner Karel van Miert cast as the villain.

The EU is a global maritime power controlling around a third of the world fleet, totalling 177 million tonnes by the end of 1995, with more than 5,000 registered ships and a further 12,400 flying flags of convenience.

The fate of the EU's bulk shipping sector is not greatly influenced by Union directives. Moreover, ships, like capital, are mobile and their owners can switch domicile overnight if they do not like labour laws or taxes back home.

By contrast, the fate of the EU's container shipping industry is very much in the hands of the Commission, in particular the Directorate-General for competition (DGIV), which has been involved in bitter, protracted anti-trust battles with carriers serving Europe, Asia and the United States.

Until recently, the Commission gave shipping a wide berth. That is changing fast as Van Miert takes on the container lines and Kinnock tightens maritime safety rules and pens a new strategy for the industry.

Kinnock is a hero because his strategy paper last March eschewed intervention, while Van Miert is the villain because he has dared to treat shipping “like any other industry”.

The shipowners are sticking to their argument that they must cooperate to get returns from investments of 50-58.3 million ecu per vessel and to run reliable scheduled services for Europe's exporters and importers.

Europe's container carriers are forging alliances, sharing ships and going for full-scale mergers to blunt the challenge from low-cost Asian rivals, especially Korean and Chinese.

The well-publicised spats between the container lines and the Commission have overshadowed their new spirit of cooperation.

The former's biggest fear is that within ten or 15 years there will be very few EU nationals crewing Union ships unless concrete action is taken to cut the cost of hiring Europeans.

The European Community Shipowners' Association also wants the Commission to take action to ensure EU-flag vessels enjoy the operational and fiscal conditions available under the most attractive flag of convenience.

The Union is going to get a lot more intimate with shipping, regardless of whether the industry likes it or not.