[310114.EN.BIZ] Lift EU Block Exemption On Shipping Consortia, Global Shippers Forum

The Global Shippers' Forum (GSF) is calling for a repeal of the European block exemption that allows greater scope for operational alliances in which the ships are run in united ship management system, but function independently in sales and customer service.

 

The move comes as consortia regulation No 906/2009 is to expire in April 2015, and Brussels is now considering whether or not to renew it, reports Lloyd's List. Alliances differ from freight conferences of old where prices were set by member lines and in the case of the US-governed Transpacific Stablisation Agreement still do, although its rate hikes are announced as "recommendations".

The GSF, which incorporated itself to become closer to intergovernmental bodies such as UN agencies, has been in conflict with the European Shippers Council (ESC) and the Asia Shippers Council (ASC) over container weigh-ins. The ASC quit the GSF more than a year ago because it said the body would have diluted its vote by allowing in smaller regional councils.

The GSF said in a statement that its recommendation to the European Commission was meant "to ensure that there will no longer be any special treatment of the maritime sector under EU competition law" to allow the maritime industry to be treated the same as other sectors.

At present, a liner shipping consortium has a block exemption from European Union competition laws provided its market share is less than 35 per cent. A larger alliance is not necessarily unlawful, but members must conduct a self-assessment to ensure there is no abuse of its dominant position.

Said GSF secretary general Chris Welsh: "As it is now well established what the acceptable parameters of consortia agreements should be, there is no longer any obvious need for a BER 'safe harbour' as self-assessment is quite sufficient for standard consortia agreements."

Accordingly, the GSF said the merits of standard consortia agreements will continue to exist in the absence of any block exemption regulation since self-assessment arrangements under the Horizontal Competition Guidelines will cover good agreements that genuinely confer benefits to shippers through reduced costs, lower rates and extended and enhanced services.

Both the proposed P3 Alliance between Maersk, CMA GM and MSC and the expanded G6 alliance would exceed the 35 per cent limit on key trade lanes.

"GSF strongly believes that the P3 Global Alliance Agreement shows that carriers do not need the consortia block exemption to plan their co-operation," said Mr Welsh.

Some lawyers, who argue that the rules should be renewed, have demanded that the 35 per cent threshold be increased to bring it into line with other jurisdictions where up to 50 per cent market share is permitted.

Source : HKSG.