Freight News, Sea

CMA recommends end to liner block exemption – updated

[ February 12, 2024   //   ]

The UK’s Competition and Markets Authority (CMA) has recommended to the government not to renew the Liner Shipping Consortia Block Exemption Regulation (CBER) on its expiry on 25 April. The CBER was inherited from the European Union and allows liner consortia to operate, under certain conditions.

The European Commission announced on 9 October that It would not extend the Regulation in the EU.

The CMA will consider responses to the consultation before making a final decision.

Head of Trade at Logistics UK, Nichola Mallon, said that the decision was good news for businesses that ship goods internationally and had its full backing.

Mallon added: “Logistics UK acknowledged the robust methodology, thorough analysis and scenario modelling used by the CMA in reaching this conclusion, and agreed that the conditions to warrant a CBER do not exist. In addition, our members believe that self-assessment is the best and most effective way for co-operations to be undertaken by shipping lines.

“We believe that UK trade is best facilitated by solutions that find the right balance between the needs of and benefits to shipping lines, exporters and importers shipping goods. Logistics UK is now looking to government to implement this recommendation.”

The British International Freight Association (BIFA) also welcomed the CMA’s decision.

It said that it had conducted a robust analysis of the deep sea container shipping market, and concluded that the conditions did not warrant the continued existence of a CBER for the UK.

Director general Steve Parker said: “The decision confirms the provisional recommendation made by the CMA in November 2023 and is a sensible conclusion to the ongoing container market public consultation that has been conducted by the CMA since the start of last year.”

BIFA had said earlier that it was extremely concerned that container shipping lines, and the easements and exemptions provided to them, have been distorting the free market to the detriment of international trade, businesses and consumers.

Parker added: “Whilst this regulatory change, if implemented, will not end shipping line consortia and alliances, it will allow greater and ongoing scrutiny of such arrangements; and ensure that the lines will be subject fully to competition law. That will be welcomed by BIFA and its members and we call on the Secretary of State for Business and Trade to uphold the Agency’s decision.

“BIFA, and its members, are not anti-shipping line. Members know that shipping lines are essential parties in the global supply chain and hope that this decision will create a suitable balance between shipping lines as carriers, and its members as customers; leading to the creation of a long term, stable and successful deep sea container market that is in the best interest of all who are engaged in international trade.”

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