China's Ministry of Transport issued “Circular No. 20 (2009) on the Implementing Rule of the International Container Liner Freight Filing” which requires export container rates and tariffs to be “normal and reasonable.”
“This is an anti-price war measure , notes David Lammie, director of Yangtze Business Services Ltd. “Even though many ocean shipping lines have withdrawn capacity following the economic downturn, there is a raging price war among the liners to get the export business.” The filing requirement, Lammie continues, is designed to prohibit further price reductions.”
The circular states the purpose of the filing requirements is to protect fair competition . It states specifically, “Any cargo soliciting at 'zero' or 'negative' freightrate shall be prohibited.”
In the US, the National Industrial Transportation League (NITL) has expressed concerns over the rate transparency and impact on contracts. It notes that under the Ocean Shipping Reform Act of 1998, rates are among the contract terms that are confidential and known only to the parties to the rate contract and the Federal Maritime Commission. NITL said it had not had an opportunity to review the documents connected to the filing requirements, but it is examining the degree of transparency and impact the filings would have on contracts.
To read Circular 20, click here.
For the full document provided by Market Avenue, click here.