Freight News, Sea

Updated: Shipping groups call for five more years for consortia

[ December 20, 2018   //   ]

Shipping groups call of five more years for consortia
Four trade associations representing the international liner shipping industry have urged the European Commission to continue the Consortia block exemption which allows container alliances to operate.
The World Shipping Council (WSC), the European Community Shipowners’ Associations (ECSA), the International Chamber of Shipping (ICS), and the Asian Shipowners’ Association (ASA) called for the block exemption regulation (BER) to be extended for five more years beyond its current 2020 expiration date.
The BER allows shipping lines with a combined market share of below 30% to sign cooperation agreements or to provide joint cargo transport services, where this would improve productivity and service levels
The shipping industry groups argued that vessel sharing arrangements are a fundamental part of the global liner shipping network. They added that, despite recent mergers in the liner industry, the industry remains unconcentrated and highly competitive, with freight rates at half the level of 20 years ago. The BER also helps carriers reduce emissions through better utilisation of vessel space, they said.
President and chief executive of the World Shipping Council, John Butler said: “The BER has worked very well for almost 25 years. It sets out clear rules that can be practically applied without the need for extensive legal analysis. This means that carriers can focus on seeking the most efficient transportation solutions without the cost and delay associated with legal self-assessment for these routine operational arrangements.”
Secretary general of ECSA, Martin Dorsman, added: “A lot has changed in our industry in the past five years, but the fact is that there is still fierce competition among carriers. The purely operational agreements covered by the BER foster competition by lowering barriers to entry and enabling carriers to compete on more routes.”
However, the Global Shippers Forum (GSF) spoke up in favour of revoking the Block Exemption. James Hookham, GSF Secretary General, commented: “GSF has recommended these special privileges should come to end and the liner shipping industry should begin the transition to normal competition conditions. There is, potentially, scope for the existing legal instruments to be replaced by modified or augmented arrangements, but only where the impact of this transition could cause unnecessary disruptions. The parameters of any replacement regime should be discussed and consulted upon by the Commission with the representatives of the stakeholders, which would have the additional benefit of engendering a much-needed consensus on the future of a vital industry.”

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