EU extends liner consortia block exemption

The European Commission issued a statement proposing to extend the regulation of excluding liner shipping consortia from the EU antitrust rules for additional 4 years, adding that the current measure is still adequate.

The “Consortia Block Exemption Regulation (BER)” is set to expire on April 25, 2020, and the Commission will finalize the initiative prior to its expiry.

Traditionally, the EU is against agreements between companies that restrict competition. However, the maritime Consortia Block Exemption Regulation allows, under certain conditions, shipping lines with a combined market share of below 30% to enter into cooperation agreements to provide joint cargo transport services.

The Initiative is based on results of the evaluation of the Consortia BER conducted from Q4 2018 to Q3 2019.

The commission collected data from the general public, numerous stakeholders and national competition authorities of the EU. Furthermore, data was also collected from other international organizations such as the OECD International Transport Forum and UNCTAD.

Liner shipping service consist of the provision of regular, scheduled maritime cargo transport on a specific route. Thus, they need important levels of investment, which are often provided by several carriers cooperating in consortia agreements. Consortia generally lead to economies of scale and better utilization of the space of the vessels.

As the Commission stated

Overall, the evaluation showed that the market conditions of the liner-shipping sector still appear to necessitate the existence of a sector-specific BER. Therefore, we propose that the CBER application period should be prolonged.