Generally, EU law bans agreements between companies that restrict competition. However, the Consortia Block Exemption Regulation allows, under certain conditions, liner shipping operators with a combined market share of below 30% to enter into cooperation agreements to provide joint liner shipping services (known as "consortia"). These agreements, however, cannot include price-fixing or market-sharing.
The current Consortia Block Exemption Regulation was adopted in 2009 and prolonged in 2014 by five years, and was due to expire on 25 April 2020.
In September 2018, the Commission launched a public consultation and conducted an evaluation of the Consortia Block Exemption Regulation.
This showed that despite evolutions in the market (increased consolidation, concentration, technological change, increasing size of vessels) the Consortia Block Exemption Regulation "is still fit for purpose, in line with the Commission's "Better Regulation" approach to policy-making"
More specifically, the Commission has found that the Regulation results in efficiencies for carriers that can better use vessels' capacity and offer more connections.
The exemption only applies to consortia with a market share not exceeding 30% and whose members are free to price independently. In that context, those efficiencies result in lower prices and better quality of service for consumers.
Specifically, the evaluation has shown that in recent years both costs for carriers and prices for customers per TEU have decreased by approximately 30% and quality of service has remained stable.
Following the EU announcement, the ETF condemned the decision, noting it disregards a public consultation and reinforces the inequality and unfairness that is rampant in the maritime industry.
Shipping lines often act as if they were the only players in the maritime industry. But their market and technological choices have consequences on the rest of the maritime supply chain, including its workers,
...said Estelle Brentnall, Head of Maritime at the ETF.
As ETF explained, alliances and vessel sharing agreements practices, along with vertical integration of shipping companies into container terminals, have a significant impact on other parts of the industry.
The current situation has a particularly negative effect on the financial profitability of terminals and other segments of the maritime industry, such as the tug sector and feeders, and adversely affects maritime jobs.