Container shipping lines, such as HMM and Yang Ming Line, that receive state aid from there are gaining an unfair advantage over their competitors and the practice should be investigated by the European Commission, Maersk CEO Søren Skou told reporters, following the release of the Danish company’s first quarter results.
Denmark’s maritime publication Shipping Watch reported that Skou had called the practice “unacceptable” at a time when the container shipping industry is faced by significant challenges from the Covid-19 outbreak.
"It is totally unacceptable. The two shipping lines have not made money for ten years. The EU should do something about it, as it's unfair competition," Skou reportedly said.
A Maersk spokesman confirmed to Container News that Skou, in responding to questions from reporters at a press conference, felt that “It is totally unacceptable that both South Korea and Taiwan are helping their national shipping lines HMM and Yang Ming at a time when the global container industry is hit by the coronavirus pandemic.”
He added that “It distorts competition when the two shipping lines get financial help from their state owners.”
Asked if the later reports of a state-backed loan of US$1 billion constituted state aid that should also be reviewed by the European Commission, the Maersk spokesman said this news came after the press conference and Skou was not asked this question. Maersk added the CEO was unavailable for further comment.
Sources at the European Commision told Container News, that the EC "is aware of South Korea's aid to its own industry".
Without mentioning Maersk's complaint or issues around HMM and Yang Ming the EC source insisted, "The Commission is committed to addressing these concerns through different tracks. The EU actively promotes the revision of the WTO rules, notably those related to subsidies, and actively participates in the work of the OECD WP6 shipbuilding Committee, where it co-ordinates the input of the EU and its Member States on trade issues to reflect the EU's trading interests."
The source added that the EU had made a request to the Organization for Economic Co-operation and Development, WP6, a group which specifically covers shipping and shipbuilding industry market development, to prepare a report identifying the most distortive measures affecting the shipbuilding industry.
"This will ensure the utmost transparency on the measures provided to the shipbuilding sector. In its bilateral contacts, the Commission regularly raises its concerns about state measures affecting the sector. The Commission monitors subsidies on an ongoing basis and investigates further where appropriate," said the source.
Nick Savvides
Managing Editor
