© Dan Talson Container liner industry groups today called for the European Commission to renew the block exemption regulation that covers shipping services for a further five years. The current exemption, which allows carriers to operate as consortia in trades serving the EU and was introduced when the EC banned the liner conference system, is set to expire on 25 April 2020. Earlier this year, a report from the OECD-funded International Transport Forum concluded that the consolidation of alliances into three major groupings had reduced shipper choice and service levels, while suppliers to the carriers – such as ports, feeder operators and hauliers – have been left vulnerable to the bigger buying power of alliances. But in a joint submission to the EC today, the World Shipping Council (WSC), International Chamber of Shipping (ICS), the European Community Shipowners’ Association (ECSA), and the Asian Shipowners’ Association (ASA) argued that the block exemption had made the industry more stable and pointed to the fact that freight rates had declined considerably while it has been in force. Martin Dorsman, secretary General of ECSA, said: “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 [block exemption regulation] foster competition by lowering barriers to entry and enabling carriers to compete on more routes.” A key point for the regulation’s critics is that when it was last renewed in 2014, the EC adjusted its market share criteria, judging that any single consortium should not have more than a 30% market share on any given trade, which has increasingly come into focus with the consolidation of the deep-sea alliances into three major groupings. The 85-page submission to the EC argued that while attention has generally focused on the three east-west alliances which dominate the Asia-Europe and transatlantic trades, the scope of the BER covered far more. “Alliances, which have existed for over two decades, are still vastly outnumbered by the number of non-alliance services in EU international trades: it is estimated that there are 61 vessel-sharing arrangements outside the big three alliances and at least an additional 57 services with slot agreements with third parties in place. “Virtually all of those smaller vessel-sharing arrangements are within the strict market share boundaries of the BER safe harbour, and are properly viewed as presenting minimal risk to competition,” the submission says. John Butler, WSC president and chief executive, added: “The bottom line is that 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.” And with the IMO’s 2020 low-sulphur regulations looming larger by the day, as well as the grander 50% reduction in greenhouse gas emissions target by 2050, the submission also argued that vessel-sharing would be key to carriers meeting the new requirements. ICS secretary general Guy Platten explained: “A factor that is new in this review of the BER is the fact that the IMO has now set concrete goals for greenhouse gas emissions reductions for the international shipping industry. “We will need to use every available tool to increase efficiency, and the BER supports vessel-sharing that is a key tool for the liner sector to reduce its fuel burn and therefore reduce its emissions.”
The World Shipping Council, International Chamber of Shipping, European Community Shipowners’ Association, and the Asian Shipowners’ Association have jointly urged the European Commission to extend the block exemption regulation (BER) covering shipping for an additional five years. The industry groups argue the BER has increased stability and reduced freight rates, while also maintaining a healthy level of competition. “While we are pleased that the EU is extending its current ban on Russian oil tankers in order to protect our industry, it should be noted that this extension will not address all concerns raised by ship@@