[090421.EN.BIZ] EC's Block Exemption Regulation Comes Under Renewed Attack by GSF

 

THE Global Shippers Forum (GSF) has renewed lobbying the European Commission's competition directorate to take a closer look at the liner shipping industry, reports The Loadstar, London.

A year ago, the EC granted container lines another four years of exemption from its cartel competition laws under the Block Exemption Regulation (BER), under which container lines are allowed to share operational data and form shipping alliances.

The GSF said the enormous rise in freight rates, coupled with all the other container supply chain issues, forced regulators from China, the US and South Korea to renew scrutiny of the sector, while "the EU has remained silent, yet four of the biggest shipping lines in the world fall within its jurisdiction".

GSF chairman James Hookham added: "Shippers feel side lined by the granting of block exemptions and other anti-trust protections.

"Their rights to a fair and open market have effectively been rejected in favour of greater supply-side efficiency and relief from the costs and 'hassle' of checking compliance with normal competition rules.

"It is not unreasonable to expect that these exceptional privileges are kept under close review, especially during times of unprecedented market turbulence."

However, he said: "The commission has adopted a 'legislate and forget' approach and, seemingly, abandoned shippers and other users of shipping services, such as freight forwarders and port operators, to the fate of a deliberately distorted market.

"Given the dependence of European trade on global container shipping services, this 'supervisory deficit' needs to be corrected."

Mr Hookham added: "As I speak, all those involved in world trade are waiting to see just how damaging the closure of the Suez Canal will become to schedules, service and shipping rates.

"With these additional factors yet to play out, it is vital that competition regulators engage closely with this market to monitor the consequences of the special privileges they have granted it."

Source : HKSG / Photo : GSF.