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Cargo Shipping to Keep EU Antitrust Exemption until 2024

© Marcus Millo / Adobe Stock

By Foo Yun Chee

Cargo shipping companies will be exempt from antitrust rules against anti-competitive agreements for a further four years until 2024 because this leads to lower prices and better consumer services, EU antitrust regulators said on Tuesday.

First adopted in 2009 and extended for five years in 2014, the consortia block exemption regulation will be prolonged for four more years to April 2024, the European Commission said in a statement.

It allows liner shipping operators with a combined market share below 30% to cooperate to provide joint liner shipping services, known as consortia, but does not allow price-fixing or market-sharing, both of which are hallmarks of cartels.

Following a consultation launched last year, the EU competition watchdog said feedback showed the regulation still offers benefits to the liner shipping industry.

"The consortia block exemption regulation results in efficiencies for carriers that can better use vessels' capacity and offer more connections," the EU competition enforcer said.

The International Chamber of Shipping (ICS), which represents over 80% of the world merchant fleet, welcomed the news.

"The decision is very important because it will also influence the position taken by other competition authorities around the world," ICS Deputy Secretary General Simon Bennett said in a statement.

"While the Commission arrived at its important decision before COVID-19 took hold, the knowledge that co-operative vessel sharing arrangements can continue with legal certainty will assist the recovery of global maritime trade once the current crisis is over," he said.

The trade body the Global Shippers' Forum (GSF) had previously criticized the exemption, saying it was not the solution to the industry's woes.

"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," GSF secretary-general James Hookham said in a statement in November last year.


(Reuters reporting by Foo Yun Chee; editing by Barbara Lewis)

Mar 25, 2020

 

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