Freight News, Sea

UK Competition authority U-turns on liner consortia

[ November 20, 2023   //   ]

The UK government’s Competition and Markets Authority has provisionally decided not to recommend replacing the Liner Shipping Consortia Block Exemption Regulation (CBER) to the Secretary of State when it expires on 25 April next year.
The CBER was retained from EU legislation. The CMA’s decision – which it says is still subject to further consultation – follows the European Commission’s announcement on 9 October that it would not extend the block exemption regulation that has hitherto allowed liner shipping consortia to operate. Instead, carriers operating to or from the EU must assess whether their co-operation agreements are compatible with EU antitrust rules provided in the Horizontal Block Exemption Regulation and Specialisation Block Exemption Regulation.
The CMA said that creating a new UK CBER as would not give sufficient benefits compared assessment under ordinary competition law.
Director general of the British International Freight Association (BIFA), Steve Parker, welcomed the announcement saying: “The decision follows October’s news that the European Commission would not extend the Consortia Block Exemption Regulation (CBER) and, if it becomes a final decision, will be a sensible conclusion to the ongoing container market public consultation that has been conducted by the CMA since the start of this year.”
At the time of the European Union’s announcement in October, BIFA said it was surprised that the CMA’s provisional position suggested the extension of a potentially modified CBER into UK legislation. BIFA had said in the past that its members are extremely concerned that container lines’ practices, as well as easements and exemptions provided to them, have been distorting the free market.
However, said Parker: “We are pleased that the CMA has effectively reversed that decision and reached the same conclusion as the European Commission.
“However, we note that this is a two stage review, and the CMA is looking for further feedback by 15 December on this provisional recommendation, before it presents its final decision to the Secretary of State for Business and Trade.
“There is no room for complacency. The shipping lines have hit out against the EC judgement and we understand that they have been lobbying in London for the UK to retain some form of CBER.
“Given the possibility that the shipping lines will make new submissions to the CMA, BIFA will be working with our members to provide further argument that supports the decision to let the CBER lapse.”
BIFA has said that its members are extremely concerned that container shipping lines have been distorting the free market to the detriment of international trade, businesses and consumers.
It adds: “The CMA’s provisional recommendation suggests that 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.”