Pirate Busters - American Shipper

exemption for carriers combined with the global economic crisis has created an
uneven playing field for carriers in Europe versus their Asian rivals.
He added that European governments need to redress the balance, noting that carriers
based in Asia were gaining unfair advantages from a relative lack of regulation.
“I call on the competent authorities — banks and public bodies — to protect the
three big European maritime companies and ensure the survival of the maritime
sector in Europe,” he said at the meeting, as reported first by Lloyd’s List Sept. 4
and then by international news outlets shortly afterward.
Representatives from the Danish Shipowners’ Association and the European Shippers’
Council, however, responded quickly to the riposte from Saadé, with the ship
owners suggesting that individual European governments shouldn’t be automatically
compelled to use taxpayer money to save struggling lines. The ESC told Lloyd’s
List Sept. 7 that the goal of governments worldwide should be to bring their liner
regulations in line with those in Europe, not to erode the EU ban on conferences.
The Danish Shipowners’ Association, in a Reuters report Sept. 8, pointed out
that expecting governments to provide guarantees for big lines could also create an
unlevel playing field within Europe — if, for instance, the French government were
to back CMA CGM, but the Danish government were to balk at doing the same for
Maersk Line.
And one need not even use a hypothetical, since the German government and
the City of Hamburg are expected to sign off this month on more than $1 billion
in guarantees for German line Hapag-Lloyd.
Saadé’s comments come at a time when he is clearly frustrated at the battering
his line and his industry have taken the past year. The block on liner conferences
coincided almost sadistically with the beginning of the global economic meltdown.
But it’s also a hard position for Saadé to justify, given that Europe’s three biggest
lines (Maersk, Mediterranean Shipping Co. and CMA CGM) are far and away the
three biggest in the world, and growing. They’ve all spent massive amounts on new
ships in recent years, trumping the most ambitious growth plans of any of their
rivals. The three lines have also collaborated on a handful of services in the last
two years, showing that carriers are not exactly operating in silos.
His comments that lines in Asia are receiving preferential treatment also rings
a little hollow since they have been affected by the same anti-conference regulations
on the Asia/Europe trade as Europe’s big lines have. On the transpacific and
transatlantic, the U.S. Ocean Shipping Reform Act affects carriers equally as well.
Perhaps Saadé was referring to intra-Asia routes, where indeed there is little if
any regulation, and where Europe’s big three are increasingly training their focus.
Or perhaps he just needed to vent some steam after a brutal year. (Eric Johnson)
Hazmat politics heats up
A senior House lawmaker wants a U.S. Transportation Department agency responsible
for regulating the transport of hazardous materials to end its perceived
“cozy” relationship with the industry.
“It appears that complacency and neglect permeate the culture of the Pipeline
and Hazardous Materials Administration (PHMSA),” said House Transportation
and Infrastructure Committee Chairman James Oberstar, in his opening statement
during a hearing on Sept. 10 into concerns with transporting hazardous materials.
“It seems PHMSA has become misguided in its mission,” he added. “The PHMSA
culture appears plagued by a belief that the agency should make things as easy as
possible for the industry it should be regulating.” (Chris Gillis)
Correction
In the recent Who’s Making Money (September American Shipper, pages 40-43),
Hong Kong-based ocean carrier OOCL’s revenue, operating profit and profit margin
were incorrectly reported. The numbers given in the report were group revenue, operating
profit and profit margin for OOCL’s parent OOIL. In 2008, OOCL’s container transport
division had revenue of $6.503 billion, operating profit of $392 million and a profit
margin of 6 percent. Of note, the corrected figures move OOCL up one place in both
the operating profit and profit margin rankings, taking them to No. 4 in operating profit
(ahead of Hapag-Lloyd) and to No. 2 in profit margin (slightly ahead of “K” Line).
4 AMERICAN SHIPPER: OCTOBER 2009
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Brian Amero
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Chris Antoniou
vice president of global supply chain
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McCormick & Co. Inc.
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director of logistics,
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global logistics leader,
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committee, National Industrial
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