Liner Alliances BEO under Review in Singapore

The Competition Commission of Singapore (CCS) is seeking public feedback on the extension of the Block Exemption for Liner Shipping Agreements Order (BEO) in its current form, for another five years until 31 December 2020.

The BEO exempts a category of liner shipping agreements from prohibitions against anti-competitive agreements in Singapore. It was extended in 2010, and will expire on 31 December 2015.

The public consultation will seek views on the possible impact of the proposal on the Singapore economy, in particular on players in the maritime industry such as shippers, port operators, liners, and logistics service providers.

CCS proposed to recommend an extension of the BEO taking into consideration the findings of a study it commissioned, as well as feedback from CCS’s own consultation with key industry stakeholders.

The Commission said that it has also been monitoring developments in the industry as well as regulatory developments overseas.

However, the Singapore National Shippers’ Council (SNSC) said it would request from the Competition Commission to drop the BEO from the Competition Act during the review of the order.

Namely, the Council is worried by the effects on shippers of the ongoing trend that has seen formation of major carrier alliances.

“Today, all major carriers in the east-west trades are in one of four aliances, a development unprecedented in the liner shipping industry.This is cause for concern for shippers as the liner industry is possibly the only industry which enjoys immunity from prosecution under antitrust laws for collective agreements,” SNSC Chairman John Y.Lu said.

CCS said it will make a recommendation to the Minister for Trade and Industry after it has considered written submissions received during the public consultation.