Organisations representing the main maritime logistics industry stakeholders, as well as EU national maritime authorities, met on February 8 in Paris to discuss about the EU Consortia Block Exemption Regulation. The associations attempted to assess the validity of the BER, which provides the liner shipping industry an exemption from normal competition rules.
Namely, CLECAT, ETA, EBA, EBU, ESO, IWT, ESC, FEPORT and the GSF, all agreed that market developments which took place over the last five years justify a review of the regulatory framework. They also considered that today’s framework is obsolete, considering the fact that the majority of the carriers operate in alliances and that market concentration is increasing.
In the meantime, an important condition for the exemption, which is to provide benefits to the customers, is no longer met, as neither service quality nor productivity have improved over the years, the associations added.
Users of liner shipping services and their service providers have suffered from an increasingly unbalanced market situation since carriers entered into major cooperation agreements
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After also discussing about the International Transport Forum report: ‘The Impact of Alliances in Container Shipping’, which has concluded that alliances on the container industry impact the sector negatively, they concluded that the European Commission should repeal the Consortia Block Exemption Regulation, as a revised regulatory framework clarifying the current BER must be adopted.
For this reason, some of the associations have already submitted their detailed positions to the European Commission or will do in the near future.
On the other hand, four trade associations of the international liner shipping industry: World Shipping Council, ECSA, ICS, and the Asian Shipowners’ Association submitted comments to the European Commission supporting the extension of the EU consortia block exemption regulation (BER) for five years more beyond its current 2020 expiration date.
According to John Butler, President and CEO of the World Shipping Council, the bottom line is that the BER has worked very well for almost 25 years, as it establishes clear rules.
This means that carriers can focus on seeking the most efficient transportation solutions without the cost and delay associated with legal self-assessment for these routine operational arrangements
For its part, ESPO has not taken a stance on whether the Consortia Regulation should expire or be prolonged. However, it stressed the need for more monitoring of the current situation, in particular as regards the impact on the market power balance and the benefits for the consumer.
