Block exemption recommendation slammed
26 November 2019
The recommendation by the European Commission to renew the Consortia Block Exemption Regulation (CBER) for a four-year period from April 2020 has been slammed by the Global Shippers’ Forum (GSF), the voice of businesses importing and exporting goods around the world.
James Hookham, secretary general of GSF said: “We are disappointed with the outcome of the Commission’s review and disagree on several points with its reasoning. We shall be setting out our concerns and arguments in response, and campaigning for greater policing of shipping lines’ activities.”
The principal commercial activities that the CBER allows are vessel-sharing arrangements between shipping lines that allow a frequency and range of destinations to be offered to shippers by a ‘pooling’ of vessel capacity on a particular route. The EU’s stated intention to renew the BER, while not unexpected, ignores the views of exporters and importers to and from the EU and their global suppliers and customers, who are concerned at continuing poor service levels in some trades served by consortia due to over-investment in capacity and seeming lack of competitive pressures.
Mr Hookham continued: “Shippers are well used to similar pooling arrangements in the aviation sector, which allows code-sharing arrangements to be established for the same aircraft. But these seem to be fully compatible with EU Competition law without the need for a Block Exemption. What is it about the global shipping lines that warrants this form of exceptional treatment under competition law? We are not convinced by the Commission’s arguments or conclusions.
“In our view the Commission has missed the opportunity to ask the bigger questions about how the shipping sector got into its current situation of historically low shipping rates and over-capacity on many routes and whether the continuing exemptions from normal competition rules provided by the Block Exemption are the right remedy in the long term.
“The Commission looks set to prop up the shipping lines for a further four years without fully understanding why. European manufacturers and retailers, together with their customers and suppliers around the world, as the users of container shipping lines, deserve better support and service from their competition authority.”
GSF is the global voice for shippers and represents the interests of national and regional shippers’ organisations in Asia, Europe, North and South America and Africa. It provides a platform for importers and exporters of goods around the world with international regulatory agencies and decision-making bodies and is focused on promoting the safe, efficient and sustainable movement of goods in all modes of transport. GSF was registered as a non-governmental organisation in the United Kingdom in June 2011.