Freight News, Sea

GSF calls for rethink on shipping consortium criteria

[ January 14, 2020   //   ]

The Global Shippers’ Forum (GSF) has called on the European Commission to change its criteria for allowing shipping line consortia.

The EU Consortia Block Exemption Regulation (CBER), which allows shipping lines to exchange information and to co-operate, is due to expire in April and the Commission is currently assessing responses to a proposal to extend it for a further four years.

In its response, GSF claims the Commission’s chosen criteria did not adequately assess evidence of poor service levels and other shortcomings.

James Hookham, GSF’s Secretary General said: “The Commission’s proposal to extend the CBER by another four years seems largely based on its assessment that it saves money for the shipping lines and cuts down on red tape in the Commission. But any Block Exemption is a massive loss of fundamental protections for shippers and other ‘consumers’ of consortia services under European competition law and the Commission needs a much more robust means of assessing the impacts of the CBER on the entire market.”

GSF has proposed a different way of assessing the effects of the Block to reflect more fairly customers’ interests including:

-Declaring what data is to be used to enforce the terms of the Block Exemption (the Commission admitted it is difficult to estimate the exact market shares of consortia).

-Monitoring more closely how shippers’ and other users’ experiences are improved by the workings of the Block Exemption (shippers’ first-hand evidence was discounted in favour of historical survey trends).

-Assessing more frequently how confident shippers and other users are feeling about the effects of the Block Exemption (currently this will only happen at the time of renewal, ie in four years’ time).

-Providing shippers and other users with quicker and more accessible ways of getting price and service anomalies investigated (currently, shippers need to lodge an official ‘Complaint’ with the Commission).

James Hookham concluded: “Given the major changes that are taking place in world trade and the container shipping industry, it is vital that the Commission takes a forward view and anticipates these effects on shippers as it considers whether to prolong the CBER.” He said that GSF believes the exemption to be life-expired and that it should be replaced by more specific and flexible rules that take much greater account of shippers’ and other users’ interests, adding: “The Commission needs to remember that the users of Consortia services are in fact European businesses and their customers and suppliers around the world, importing and exporting goods to and from the EU, and that much greater account should be taken of their needs and views before prolonging the CBER.”