The European Commission has decided not to extend the EU legal framework which exempts liner shipping consortia from EU antitrust rules (Consortia Block Exemption Regulation CBER). The Commission has concluded that the CBER no longer promotes competition in the shipping sector and therefore it will let it expire on 25 April 2024.
he decision follows a review process launched in August 2022, aimed at gathering evidence on the functioning of the CBER since 2020, in view of its expiry on 25 April 2024. The CBER allows shipping lines, under certain conditions, to enter into cooperation agreements to provide joint cargo transport services, also known as ‘consortia’.
What is the Consortia Block Exemption Regulation (CBER)?
EU law generally bans agreements between companies that restrict competition. However, the Consortia Block Exemption Regulation allows, under certain conditions, liner shipping operators to cooperate for the provision of joint services.
The findings of the evaluation
In August 2022, the Commission launched a call for evidence inviting feedback from stakeholders on the performance of the CBER. On the same day, it sent targeted questionnaires to the most interested parties in the maritime liner shipping supply chain (i.e., carriers, shippers and freight forwarders, ports, and terminal operators) on the impact of consortia between liner shipping companies as well as of the CBER on their operations.
Prior to its evaluation, as part of its sectoral monitoring activities, the Commission had regular exchanges with market participants as well as with competition and regulatory authorities in Europe, the US and other jurisdictions, on the challenges faced by the shipping sector.
It also sent questionnaires to carriers on the effects of the coronavirus pandemic on their operations and on the maritime supply chain and commissioned an independent fact-finding study.
Overall, the evidence collected from the stakeholders points towards the low or limited effectiveness and efficiency of the CBER throughout the 2020-2023 period.
Given the small number and profile of consortia falling within the scope of the CBER, the CBER brings limited compliance cost savings to carriers and plays a secondary role in carriers’ decision to cooperate.
Furthermore, over the evaluation period, the CBER was no longer enabling smaller carriers to cooperate among each other and offer alternative services in competition with larger carriers.
Based on the feedback received, the Commission has decided not to extend the CBER and to let it expire on 25 April 2024. The expiry of the CBER does not mean that cooperation between shipping lines becomes unlawful under EU antitrust rules.
Instead, carriers operating to or from the EU will assess the compatibility of their co-operation agreements with EU antitrust rules based on the extensive guidance provided in the Horizontal Block Exemption Regulation and Specialisation Block Exemption Regulation.