Global Shippers Forum Pans Extending Liner Carrier Protection

An organization that represents shippers in many countries around the world, including the U.S. and Canada, has added its voice to those expressing disappointment to a recommendation by the European Commission to renew the consortia block exemption regulation, which gives antitrust protection to container liner carriers who cooperate in vessel-sharing agreements.

James Hookham, secretary general of the Global Shippers Forum (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 European Commission recommended on Nov. 20 that the block exemption regulation be extended for a four-year period from rather than expiring April 25, 2020 The decision is, however, subject to a four-week "feedback period" running until Dec. 18.

"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," Hookham said.

The Dutch Shippers Council denounced the decision last week, while it won praise from the World Shipping Council, the principal trade organization for the container liner industry.

The European Shippers Council said earlier this year that the block exemption regulation "has not contributed to better services in maritime transport for shippers as it aimed to" and called for it to be "amended, if not repealed."

GSF said renewal of the block exemption regulation "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."

Hookham contrasted the pooling arrangements in the aviation industry with liner carriers' vessel-sharing agreements.

"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," he said.

"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," he added.

GSF calls itself the" global voice for shippers" and represents the interests of national and regional shippers' organizations including National Industrial Transportation League in the U.S. and the Freight Management Association of Canada. Other GSF members are in Europe, Asia, South America and Africa.

Image by Jason Goh from Pixabay