World Shipping Council renews block exemption campaign

With liners feeling the pressure lobby group World Shipping Council yesterday submitted additional information to the European Commission which is deliberating whether to extend the consortia block exemption regulation (BER).

The liner group engaged RBB Economics to evaluate the evolution of European liner services from 2013-2018, in which it claims carrier costs per teu decreased substantially and shipping rates decreased in similar proportions.

“The close correlation between rates and costs shows that shippers benefit from reductions in operating costs in the form of lower overall freight rates (including surcharges),” the council stated in a release.

Many groups have in recent months called for the European Commission to drop the BER, but shipping bodies are fighting back.

The council went on to claim that the liner shipping connectivity level has increased for the vast majority of EU member states over the last five years.

The council also suggested that in the absence of consortia Europe would have to prepare for a drop in liner service quality as carriers would reduce service frequencies in order to maintain utilisation.

“Vessel sharing arrangements are essential tools for providing efficient, environmentally responsible, and frequent liner shipping services to countries all over the globe,” the council claimed.

The block exemption has been in the headlines in recent months with a number of important voices suggesting the EU should not renew it in 2020.

In a 127-page report on container alliances issued last November, the International Transport Forum (ITF), administrated by the Organisation for Economic Co-operation and Development (OECD), called on Brussels to not renew the BER.

“A repeal of block exemptions is unlikely to result in the termination of current and future alliances, as these could still be authorised under competition law on a case by case basis,” ITF explained, adding: “However, it would ensure greater scrutiny of individual alliances and thus more effectively deter any anticompetitive conduct in the sector.”

The ITF is expected to reveal new data today in its ongoing battle to get BER rescinded.

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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