Liner Industry Calls for Extension of Consortia Block Exemption

Venta MaerskImage courtesy: Maersk

Four liner shipping associations have asked the European Commission to extend the EU consortia block exemption regulation (BER) for five more years beyond its current 2020 expiration date. 

The comments were submitted by the World Shipping Council (WSC), the European Community Shipowners’ Associations (ECSA), the International Chamber of Shipping (ICS), and the Asian Shipowners’ Association (ASA) within the public consultation being held by the Commission’s Directorate-General for Competition (DG COMP).

The industry bodies insist that vessel sharing arrangements are a fundamental part of the structure of the global liner shipping transportation network and that the industry remains unconcentrated and highly competitive, with freight rates at half of their levels twenty years ago, despite recent mergers in the liner industry.

The shipping associations also added that the consortia BER has since 1995 provided transparent and practical legal guidance to vessel sharing arrangements for international liner shipping services operating from and to EU ports, and that the BER helps carriers reduce air emissions and greenhouse gases through higher utilization of vessel space.

“The bottom line is that the BER has worked very well for almost 25 years. It sets out clear rules that can be practically applied without the need for extensive legal analysis. 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,” John Butler, President and CEO of the World Shipping Council, said.

“A factor that is new in this review of the BER is the fact that the IMO has now set concrete goals for greenhouse gas emissions reductions for the international shipping industry.  We will need to use every available tool to increase efficiency, and the BER supports vessel sharing that is a key tool for the liner sector to reduce its fuel burn and therefore reduce its emissions,” Guy Platten, Secretary General of ICS,  added.

Captain Ang Chin Eng, Secretary General of the Asian Shipowners’ Association, urged the Commission to maintain the BER as an important basis for international legal uniformity, by saying: “many Asian economies/countries have legal regimes that treat liner shipping consortia in the same competitive manner as the EU. It is in the interest of international trade that policies and laws are aligned globally at both ends of the trade route which will provide clear guidance for international shipping.” 

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