EU extends liner shipping antitrust exemption for 4 years
Liner shipping - Photo By kees torn
(BRUSSELS) - The EU on Tuesday prolonged for another four years the regulation outlining conditions under which liner shipping consortia can provide joint services without infringing EU antitrust rules.
Liner shipping services comprise the provision of regular, scheduled non-bulk maritime cargo transport (the vast majority in containers) on a specific route.
Liner shipping consortia are agreements between shipping companies to operate joint liner shipping services and engage in certain types of operational cooperation leading to economies of scale and a better utilisation of the space on vessels.
EU law generally bans agreements between companies that restrict competition. However, the Consortia Block Exemption Regulation allows, under certain conditions, liner shipping operators with a combined market share of below 30% to enter into cooperation agreements to provide joint liner shipping services (known as "consortia"). These agreements, however, cannot include price-fixing or market-sharing.
The current Consortia Block Exemption Regulation was adopted in 2009 and prolonged in 2014 by five years, and was due to expire on 25 April 2020.
The EU regulation known as the "Consortia Block Exemption Regulation" is now extended until 25 April 2024.
A public consultation was launched in September 2018 to evaluate the Consortia Block Exemption Regulation, which included a wide consultation of stakeholders in the maritime liner shipping supply chain. The findings of the evaluation were summarised in a Staff Working Document, which was published in November 2019 on the webpage of the consultation.
The Commission says the evaluation showed that despite evolutions in the market (increased consolidation, concentration, technological change, increasing size of vessels) the Consortia Block Exemption Regulation is still fit for purpose, in line with the Commission's "Better Regulation" approach to policy-making, and delivers on its objectives. Moreover, the consortia agreements that meet the conditions set out in the Consortia BER continue to satisfy the conditions laid down in Article 101(3) TFEU.
More specifically, the Commission has found that the Consortia Block Exemption Regulation results in efficiencies for carriers that can better use vessels' capacity and offer more connections. The exemption only applies to consortia with a market share not exceeding 30% and whose members are free to price independently. In that context, those efficiencies result in lower prices and better quality of service for consumers. Specifically, the evaluation has shown that in recent years both costs for carriers and prices for customers per twenty-foot equivalent unit (TEU) have decreased by approximately 30% and quality of service has remained stable.
The Commission decided therefore to prolong the validity of the Regulation for four years.