European Commission to Extend Liner Consortia Block Exemption
The European Commission is proposing to extend the regulation exempting liner shipping consortia from EU antitrust rules by another four years, having concluded that the current measure is “still adequate”
The regulation, known as the Consortia Block Exemption Regulation (BER), is set to expire on April 25, 2020.
According to the commission, the proposed initiative is scheduled to be finalized before the expiry date. The proposal will be subject to a four-week feedback period.
As explained, the initiative builds on the findings 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.
“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,” the European Commission said.
Liner shipping services consist of the provision of regular, scheduled maritime cargo transport on a specific route. They require significant levels of investment and therefore are regularly provided by several carriers cooperating in consortia agreements. Consortia generally lead to economies of scale and better utilization of the space of the vessels.
Although the EU law generally bans agreements between companies that restrict competition, 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.
“EU rules normally prevent companies from working together in a way that might restrict competition, but companies shipping cargo by sea have been granted an exemption from this ban as they often need to work together to make their operations more financially viable and efficient,” the commission added.