MARITIME ALLIANCES AND EU COMPETITION LAW

106 MARITIME ALLIANCES AND EU COMPETITION LAW economies managed to penetrate Western markets with products based, in part, on a combination of cheap production and low transport costs. Facts have proven that the question posed above can create only false dilemmas. Based on the UNCTAD (2004) Report, 126 the market had recovered rapidly and in the second quarter of 2004, the freight rates surged. The cause of the surge in freight rates was a shortage of vessels and containers, caused by the previous reces- sion phase. Relatively inelastic demand-and-supply reflected the rapid recovery of the global economy. It is apparent that this shortage directly led to increased prices as the shipowners had to offset the investment in new vessels (by building, purchasing or leasing containers or vessels). It is also evident that the shortage of supply had forced conferences to re-arrange vessels, a move that led to the further reduction of services. Figure 7: Volatility 1985-2019 126. United Nations Conference on Trade and Development (UNCTAD), Transport Newslet- ter no 24, [2004] Q2 11-14, <https://unctad.org/en/Docs/websdtetlb20042_en.pdf > [ac- cessed 28 Feb 2019], whereby is reported that: “a severe shortage of containerships is forcing a group of major carriers to plan a new Asia-Europe service deploying just seven vessels rather than the usual eight. The unusual configuration is a direct reflection of an unprecedented squeeze on tonnage availability, with the carriers in question unable to find enough ships to meet their preferred requirements. Between March and April 2004, the in- dex rose another 5.4 per cent. The annual increase up to that month varied between +54% and +95%, depending on vessel types.