Features of EC

In this context, the paper describes the primary features of EC shipping law and policy, provides an evaluation of the main features, and considers applicability relative to actual cases implementing EC shipping law and policy. The discussion should provide an understanding of the role and applicability of EC shipping law and policy relative to the current context of the shipping industry and the European Community. Main Features of the European Community Shipping Laws and Policies European Community shipping law emerges from four framework statutes. The context of these laws and policies is two-fold.

One is the categorisation of maritime nations as either developed or developing . The developed states with rich maritime tradition and strong influence in global maritime trade are Japan, Australia, New Zealand, Canada and United States while the developing states are those with a growing maritime industry including Peoples Republic of China, Korea and South Korea. These countries contribute to the competitive dynamics of the international maritime industry and influence the development of EC shipping laws, in terms of the direction and support accorded by EC towards its own maritime industry.

The other is the categorisation of shipping services as either liner or tramp services. Liner services pertain to the operation and provision of services through a fixed route, timetable and variety of shippers as clients. Tramp services involve greater flexibility relative to the timeframe and port destinations with services fulfilled via time or voyage charter party. This is akin to the distinction between fixed routes and charter routes in land transportation.

By categorising shipping services into two general classifications, the shipping laws of the EC revolved around these two types of shipping services. Overall, competition and maritime industry growth are at the core of EC shipping laws. Main Features of the European Community Shipping Laws The first shipping law is Regulation 4056/86 providing guidelines on procedure and exemption provisions for liner conferences or the agreement among shipping firms for the regular service via a specific trade route, freight rates, and forms of services .

This is one of the first shipping laws integrating the concept of competition. This law provides line conferences exemption from the operation of the prohibition for cartels contained Article 81(1) of the European Community Treaty . The exemptions operate by allowing the liner conferences to set rates on maritime transport as long as these meet a number of conditions or obligations intended to ensure the continuity of services while at the same time supporting industry growth.

This law is exceptional in the context of the competition laws of the European Community because it applies for an indefinite period and allows the fixing of prices between competing liners. The rationale for this exemption is the creation of market stability by taking control of fluctuations in prices to a better extent as compared to individual liners or lining conferences setting variant prices individually . This in turn ensures reliability for consumers. As aforementioned, this regulation has been repealed effective October 2008.

This means the reversion to the operation of Article 81(1) of the European Community Treaty preventing cartels, involving EC and non-EC conferences, from operating cartels within the EC. The justification for the decision is to ensure greater benefits to the market. Previously, allowing liner conferences to operate was justified by the greater benefits relative to downsides so the abolition of liner conferences in the EC implies that opposite has occurred leading to the reversion.

The support of enhanced competition with the repeal of Regulation 4056/86 should support competitiveness and growth for large and small liners as well as ensure greater reliability and competitive pricing for consumers. In effect, the EC would develop its shipping industry by motivating the building of competitive advantage that contribute to improved performance especially of liners in the EC as well as better services and value creation for customers . Nevertheless, the actual impact on the EC shipping industry is yet to be apparent but this legislative change marks the commencement of new competitive regime in shipping law.