Singapore’s Ministry of Trade and Industry (MTI) is to extend the block exemption order (BEO) for liner shipping agreements (LSAs) for another five years until December 31, 2020.
The BEO exempts liner shipping agreements from the prohibition against anti-competitive agreements included in Singapore’s Competition Act, provided certain conditions and obligations are fulfilled.
The exemptions include non-mandatory adherence to tariffs, and allow member liner operators to enter into individual confidential contracts and to offer their own service arrangements.
The decision follows public consultation by the Competition Commission of Singapore (CCS), which recommended the existing regime be renewed because so much of Singapore’s container volume is transshipment cargo.
“The high degree of connectivity and availability of liner shipping services in Singapore benefits Singapore’s importers and exporters beyond what might ordinarily be expected if the port depended only on exports and imports,” the MTI commented on CCS’ recommendation.
“It is internationally recognised that LSAs, which facilitate the sharing of vessels among liners, enable more frequent services and cost savings for liners. They may also enable a group of smaller liners to provide services that compete with larger liners. Antitrust exemptions for LSAs generally remain the regulatory norm worldwide,” MTI added.
The current BEO was originally issued in 2006, extended in 2010 and will expire at the end of this year.