European Commission under attack for decision to extend liner block exemption

Associations representing shippers, freight forwarders and port service providers have hit out at the European Commission’s decision to extend the liner consortia block extension regulation (BER) for another four years. The commission has said it gave the green light for the extension as it “will continue to simplify the analysis of consortia’s compliance with competition rules, limit the dependency on external advice and reduce legal costs”.

The debate over the extension has seen liner associations battle with a host of experts over the past 12 months.

Nicolette van der Jagt, director general of the European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT), hit out at the extension, noting in a release: “This decision is based on the assessment that the [extension] saves money for the shipping lines and cuts down on the red tape in the commission, fully dismissing the views of the other parties in the maritime supply chain who are not benefiting from a similar exemption, but in many cases are competing with carriers on services.”

Lamia Kerdjoudj-Belkaid, secretary general of the European Private Port Operators Federation (FEPORT), added: ‘We find the commission’s recognition that data is missing – as outlined in the staff working document from December 2019 – unacceptable in view of the recommendation to extend the BER without a single modification of the text.”

Denis Choumert, chairman of the European Shippers Council, argued: ‘The commission has fully dismissed the views of the customers that a block exemption is a massive loss for the protection of shippers and customers under European competition law, who declare that the commission needs a more robust assessment on the impact of the BER on the entire supply chain.”

Anna Maria Darmanin, secretary general from the European Tugowners Association, pointed out that she had not received answers from the European Commission regarding the objections her association had detailed in its legal analysis submitted to the commission.

In a joint release, the bodies maintained: “Not only has DG Competition largely dismissed the views of the users, operators and service providers in the supply chain, who all responded to the original consultation in 2018, the associations all share the view that there are many legal flaws in the arguments put forward by the Commission. These flaws relate to many issues – missing data, one-sided assumptions on efficiency gains disregarding non-rate related parameters, lack of a proper definition of relevant geographic markets to assess market shares and a complete failure to identify remaining benefits to users, if the [BER] would be continued.”

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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