Industry bodies urge EC to renew vessel sharing regulation to cut emissions & increase efficiency

Illustration/Image by Offshore Energy

Sharing space on vessels contributes to the reduction of transport emissions, increases competitiveness, and improves efficiency to cut costs, top shipping industry bodies told the European Commission, asking for the renewal of the Consortia Block Exemption Regulation (CBER).

Illustration/Image by Offshore Energy

The regulation, which expires in April 2024, is now under review by the European Commission’s  Directorate-General for Competition (DG COMP).

Whilst EU Block Exemption Regulations for consortia have been continuously in place since 1995, the Commission first adopted the CBER in its current form in 2009.  It was adopted for a period of five years and, since then, it has been extended twice following EC’s evaluations, first in 2014 and again in 2020

The World Shipping Council (WSC), the International Chamber of Shipping (ICS), and the Asian Shipowners’ Association (ASA) have given their input to the EC in a joint submission, accompanied by an expert economic report prepared by RBB Economics.

The report shows that port congestion continues to be an issue as a result of the lingering effects of the COVID-19 pandemic together with lockdowns, particularly in Asia, that have a significant impact on port and terminal capacity as well as the shipbuilding activity intended to alleviate capacity constraints.

Vessel sharing is an operational measure that enables carriers to use ships more efficiently whilst continuing to compete on price and other commercial terms. It expands the range of destinations and services available to customers and reduces empty space onboard ships, thus lowering emissions.

“From an operational and environmental perspective, vessel sharing is like public transport and car-pooling schemes: seeking to maximise efficiency and reduce emissions through the shared use of transport assets and infrastructure, significantly reducing emissions per unit of cargo transported,” says Yuichi Sonoda, Secretary General of Asian Shipowners Association.

Keeping the practice in place is of major importance as the sector struggles to navigate COVID-19 -caused disruptions in the intermodal supply chain worldwide. The sector has been faced with substantial bottlenecks at marine terminals, inland warehouses and distribution centres, and in the truck, rail, and barge systems that connect ports with the hinterland. These landside issues in turn caused back-ups of ships outside of ports, significantly reducing the effective vessel capacity even as ocean carriers deployed every available owned and chartered containership. Reliability suffered and prices increased.

The frustration that shippers have understandably experienced from service delays and increased cost has been channelled towards carriers, their vessel sharing arrangements, and the regulatory tools which facilitate such arrangements, including the CBER. But data shows and regulators concur that the problems were caused by factors outside carriers’ control and not by vessel sharing,” says John Butler, President & CEO of World Shipping Council.

“Vessel sharing is a tool that has been recognized by regulators around the world as providing a foundation for the reliable movement of international trade. As we come out of the pandemic and markets normalize, we need common and predictable regulations across the globe in order to help transportation and trade networks to stabilize,” says Guy Platten, Secretary General of the International Chamber of Shipping.

The shipping organizations insist that CBER is an essential regulatory tool that yields ‘significant benefits to the EU, with no downside from a competition or consumer welfare perspective.’

As a result, they have asked the European Commission to uphold the CBER, to ensure ‘continued efficient and competitive ocean transport for European shippers and consumers, while meeting climate goals.’