Competion within the tugboat sector is not something ‘optional’
Vitiello (Assorimorchiatori): “German Antitrust authorities condemned local operators, thus confirming the superiority of the Italian model based on competition 'for the market' compared to other European models”
Three Hamburg tugboat operators received fines for 13 million euro for unlawful conduct, as the long-term cooperation between Fairplay, Bugsier and Petersen & Alpers was regarded as unlawful by German antitrust authorities following an examination of the events occurred in the Hanseatic port for several years.
Fairplay, Bugsier and Petersen & Alpers, Unterweser and its subsidiary Lütgens & Reimers were released after having acknowledged their participation in a cartel before the Bundeskartellamt, while no fee was imposed on Louis Meyer and the investigations related to another company (possibly Smit or Kotug, ed.) are pending.
“From 2002 to 2013, said tugboat operators shared orders and the turnover gained by several German ports”, Bundeskartellamt's President Andreas Mundt declared. “Said companies determined their shareholdings according to their turnover to divide service orders among themselves”.
Shareholdings had been determined in 2000-2001, when the Dutch tugboat operators started working on the rivers Elbe and Weser and, as said companies were involved in the cartel, the Bundeskartellamt investigated in collaboration with the Dutch authority for consumers and markets.
The 3 fined companies reached an agreement with the antitrust authority to continue their activity.
The German Antitrust's measure confirmed Assorimorchiatori's leader views.
“This confirms the superiority of the Italian model, which is based on competition 'for the market', compared to the Spanish one (granting authorizations but preventing newcomers from entering the market) or the Northern European competition model 'within the market' (i.e. free market).
It is unlikely that within ports a few companies can compete for years and lower tariffs as in the perfect competition models.
The result is always the same: either a cartel, as in Germany (and Holland), or a monopoly, if one of the companies is large enough to drive the others away (as in England, Denmark, Sweden)”, continued the president of the Italian tug owners association gathering port towage companies, boasting over 70 years of history and representing 80% of the Italian market.
“If this model did not manage to provide a competitive market in the port of Hamburg, handling over 10 million TEUs per year, how can it be expected to do so in small Italian ports? On the contrary, a tender to select a concessionaire would prevent companies from practising dumping, as it would lead all companies to aim at a profit, thus ensuring a contestable market both for a multinational company owning 600 tugboats such as the giants Svitzer or Smit (that already entered the Italian market, ed.), and for a company owning only 50 tugboats”.
“During the presentation of our association's book Towline connected, I emphasized towage market contestability, but when can a market be defined as 'contestable'?
Although Great Britain is one of the most liberalized countries in Europe, all its ports have a single tugboat operator, a multinational company with 600 tugboats, except for Liverpool, where there is a duopoly as said multinational company (Svitzer, a Maersk Group's subsidiary, ed.) is supported by another company owning 450 tugboats! In fact, said multinational company provides towage services throughout Denmark and in almost all Scandinavian ports...
Similarly, in France there is a single operator in all ports, the Iberian Group Boluda, which is also a leader in Spain.
In the huge German ports of Hamburg, Bremen and Bremerhaven 5 or 6 companies were supposed to work in competition, until it was found out that they had established a cartel.
The only chance for Italian companies is going to Greece (as Gesmar did with other partners, ed.).
I believe that none of the aforesaid market models really worked as Friedman's free market theory and Adam Smith's 'invisible hand' theory are mere theorizations.
In the preface of Assorimorchiatori's book, industrial economics Professor at the LUISS Guido Carli University of Rome Cesare Pozzi explained that, being institutions, markets are artificial, therefore an optimal regulation does not exist; it all depends on the results one wants to achieve.
How many chances has a company as mine – working in 5 countries and 2 continents – to compete in England with a multinational company owning 600 tugboats and with a 14 billion turnover, a subsidiary of the largest shipowner worldwide with the largest containership fleet and the greatest number of container terminals? None. This is why in England there has been a monopoly for over 10 years!
If one of the major Northern European ports launched a call for tender to award a contract, or even a 10 or 5-year concession, many Italian companies could participate in the tender as large companies would be prevented from making dumping.
This would be a really contestable market. The point is identifying the best regulation depending on the results to be achieved, which as regards towage are entrusting a specialised operator with a security service. When a maritime Authority launches a tender, it imposes obligations on concessionaires concerning navigation safety, aid to ships, fire-fighting and anti-pollution services, as well as guard tugboats and minimum safety equipments. This implies having over 100 tugboats along Italian coasts, ready to intervene in case of an emergency, and without public financings. In those countries were regulations are not based on concessions, they launch tenders for the so called emergency response vessels (ERV), i.e. tugboats chartered and paid by the government to provide aid, while in Italy it is provided for free.
Can England represent a market model if it has a monopoly managed by the largest shipowner worldwide, and it pays tens of millions for emergency response vessels? I believe it does not”, Ravenna-based Gesmar Group's Vitiello assumed before focusing on the Italian situation.
“Assorimorchiatori is aiming at making Italian companies as competitive as foreign ones. For what concerns the working hours issue, we are negotiating with trade unions to make our tugboat fleet competitive in Europe with regard to costs. In the past year, trade unions wrote two letters to the Directorate General of the Italian Ministry of Infrastructure and Transports, which is still revising a few tenders. In the next 4-5 years, almost all concessions in Italian ports will expire (Genoa, Livorno, Venice, Ravenna, ed.), and tenders must be launched one year in advance to allow concessionaires to get ready. Meanwhile, Assorimorchiatori's members are getting ready to compete with the foreign companies that will try to break into Italian ports”, Vitiello concluded.