liner conference and its impact on international trade - mohamed salah
TRANSCRIPT
Liner Conference and its Impact on International Trade
By: Mohamed Salah El Din
Presented to: Dr. Mostafa Abd El Hafez
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Outlines
What’s Liner Conference?
Types of Liner Conferences
Common Features of Liner Conferences
Advantages of liner conference
Disadvantages Of Liner Conferences
Liner Conferences and international trade
References
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What’s Liner Conference?
According to UNCTAD 1975, Liner Conference can be defined as: “A group of two or more vessel-operating carriers
which provides international liner services for the carriage of cargo on a particular route or routes within specified geographical limits and which has an agreement or arrangement, whatever its nature, within the framework of which they operate under uniform or common freight rates and any other agreed conditions with respect to the provision of liner services.”
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Types of Liner Conferences
There are 2 Types:1. Open Conferences
An open conference practically has to accept any shipping lines that applies for membership
All conferences operating to and from the United States are "open” conferences.
2. Closed Conferences A closed conference admit new members at the discretion of
existing members. Most European based shipping conferences are "closed"
conferences. A closed conference has a greater ability to prevent costly
over-tonnaging
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Common Features of Liner Conferences
1. Uniform tariff rates ,terms and conditions.2. Control of supply of shipping space through
regulation of trade participation of each member such as sailings, tonnages and port restrictions.
3. Loyalty arrangements with shippers such as contractual discounts, deferred rebates and service contracts.
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Advantages of liner conference
1. Provides stability of freight rates, services and schedule for shippers.
2. No discrimination between shippers served by a conference.
3. A shipper is sure that its competitors can’t by shopping around gain lower rates.
4. The regular service creates confidence for both shipowners and shippers that business is secure.
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Advantages of liner conference – Cont.
5. Conferences provide broader geographical coverage than individual lines, as well as a variety of ships with flexibility.
6. The elimination of competition between members lead to service competition, updated equipment of cargo handling and office organization.
7. Weaker lines, which might be eliminated in a free competition regime, survives under the wings of conferences.
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Disadvantages Of Liner Conferences
1. The major disadvantage from shippers view is the level of freight rates.
Since they are set to balance out good times on bad times rates are constantly high.
2. The monopolistic character of conferences3. The very limited competition among the
members4. Elimination of outsider5. The effect of the loyalty agreements
In reality, that the freedom of shippers is hampered and the risk of abuse of the conferences’ is possible
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Disadvantages Of Liner Conferences – Cont.
6. Many shippers claim that the high rates are hardly justified by the quality of the services offered.
7. Shippers also complain over the unequal relation in times of business negotiations
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Liner Conferences and international trade
liner conferences plays an important part in the field of shipping, and thus in world trade as a whole. Conferences lowered transport costs
Lower Cost of shipping made transport of goods overseas more easy and possible.
Prices of goods became lower. Provided product Varity & better choices for consumers. Increased standards of living
Increased goods Availability due to the increase in international trade.
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Liner Conferences and international trade – Cont.
pushing down costs and increasing efficiency of production, shipping has yielded economic growth all over the world.
This has been achieved by a more efficient allocation of resources than before.
Conferences are also used as a tool for protectionism.
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References
Tunfors, Henrik (2001), Liner Conferences, Master Thesis, Faculty Of Law. University Of Lund.
The internet: http://
viktorwonglogistics.blogspot.com/2009/11/conference-lines.html
http://www.worldshipping.org/benefits-of-liner-shipping
http://www.ehow.com/info_8559176_advantages-disadvantages-liner-shipping.html