Advantage and Disadvantage of EC Shipping Policies

There are also two advantages of EC shipping policies related to the benefits and drawbacks of shipping laws. One is the consideration of multi-party interests , particularly shipping companies and customers. The other is flexibility by couching the policies in general terms enabling the member states to exercise discretion in implementing the policies relative to their particular contexts .

Multi-party interest expressed in policies in crucial to a community operating as a unified economic block because the extent that policies consider multiple interests determines the acquiescence of these policies by the different member states and in turn reflects successful implementation. An example is the implementation of the middle ground approach in the development of policies that balances proprietary interests of the shipping companies and the dependable and quality expectations of customers.

Flexibility of the EC shipping policies is important because of the impracticality of having rigid policies difficult to implement in the different contexts of the member states. By having policies couched in general terms, adoption of the policies are easier and so would implementation. An example is the federalist approach to shipping policies that led to general policies on free participation in the shipping industry among shipping companies from the different member states.

Another example is the general policy on unfair practices, which although specifically cite price fixing as a form of unfair practice allows flexibility for implementation at the state level. Concurrently, there are also two disadvantages arising from EC shipping policies. One is the limited perspective on the competitive environment of the shipping industry . This reflects upon the timeliness of the policies.

The other is the weak linkages between some of the shipping policies . This has implications on the applicability and effectiveness of shipping policies. Limited consideration of the competitive context of global shipping makes it difficult to adapt to changes by revising or making new policies that effectively address the challenges posed especially by non-EC shipping companies. This hampers the ability of the EC shipping industry to enhance its competitiveness.

An example is the limited consideration of labour costs differences as the source of competitive advantage of shipping companies in developing countries. Since the EC shipping industry incurs higher labour costs, it needs to develop its competitive advantage based on other value creating sources involving lesser cost such as innovative technology and efficient processes to bring down operating cost and compete with the shipping industry of developing states.

Labour policies applicable to the industry and technology development policies serve as important considerations in policy development. Weak linkages between some policies decrease the overall effectiveness of policies. Most shipping policies have relations to other policies since policies cover specific areas so that the entire policy regime covers multiple industry concerns. However, weak linkages negatively affect effective implementation.

An example is the poor linkage between some of the competitive policies such as state aid to the industry for technological development and labour policies. Cost efficiency is one source of competitive advantage and labour is one cost item comprising the weakness of the EC shipping industry . This means that policies should reflect the need to build other areas of competitive advantage relative to its labour market conditions.