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Shippers Greet EC Liner Block Exemption Ruling With Disbelief

Shippers Greet EC Liner Block Exemption Ruling With Disbelief

Shippers are decidedly unhappy with the announcement by the European Commission (EC) that it favours extending container shipping's consortia block exemption regulation (BER) for an additional four years.

"We are disappointed by that decision," said Rogier Spoel, maritime policy manager at the Dutch Shippers' Council.

"We still do not understand the necessity for a linear block exemption – it's the only mode of transport that has this. Aviation certainly doesn't have it."

Spoel explained, "The problem with (BER) is that it's done through a consortium and the consortium can be within an alliance but also across an alliance. The problem with that is a shipper doesn't have any insight into how the consortia operates or if they are squeezing capacity to increase the cost of transport."

As reported in FreightWaves, BER, the de facto legislation covering liner alliances and vessel-sharing agreements (VSAs) on container trades to and from Europe, was set to expire April 25, 2020.

However, the EC said Nov. 20 that, subject to a four-week "feedback period" running until Dec. 18, it favored extending BER for four years.

Speaking to FreightWaves in Budapest earlier today (20 November) on the sidelines of the The International Air Cargo Association executive summit, Spoel was hopeful today's ruling could be amended.

"We hope there will still be some adjustments made to the block exemption regulation," he said. "We want more transparency and a clearer ruling on how container capacity is being brought into the market [by carriers].

"And we want the Commission to monitor more closely what is going on.

"So the decision today is disappointing, but let's see."

The reaction to the EC's decision was, unsurprisingly, greeted with more positivity by container lines.

Camilla Jain Holse, Head of Competition Law & Policy, A.P. Moller – Maersk, said she was pleased with the European Commission's declared intention to extend BER for another four years.

"An extension will continue to provide legal certainty around vessel-sharing agreements in the container shipping industry, ensuring the ability for liner operators to continue using VSAs to offer increased frequency and more port pairs, achieving economies of scale through operating larger, more energy-efficient vessels," she added.

"This benefits the customers in the form of improved, cost competitive products and reduced emissions from transporting their goods."

The World Shipping Council (WSC), meanwhile, commended the European Commission for "continuing to recognize both the benefits of vessel sharing consortia and the importance of the consortia BER to the efficient operation of those operational arrangements."

John Butler, WSC President and CEO, added, "Vessel sharing arrangements are an established and essential part of the liner shipping networks that carry the international trade of the European Union and the rest of the world.

"Consortia allow carriers to provide their customers with better services at lower cost, with improved environmental performance." 

More articles by Mike

Image Sourced from Pixabay

Posted-In: Government News Regulations Eurozone Commodities Politics Legal Global


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