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Shippers’ group demands action on liner block exemption

[ July 25, 2022   //   ]

Ten trade organisations, including the Global Shippers Forum and the Clecat and Fiata forwarders’ groups are demanding an immediate start to the review of European Union’s Consortia Block Exemption for the industry, in a letter to the Commission

The regulation exempts container shipping lines from many of the checks and balances of EU competition law and permits them to exchange commercially-sensitive information to manage the number and size of ships deployed and the frequency and timing of sailings on trade routes around the world.

The group says that business has suffered huge disruption to the movement of goods since the Regulation was last renewed in April 2020, with many sailings being cancelled or diverted to other ports, and ports being skipped at short notice. At the same time shipping rates have more than quadrupled on many routes and remain 3-4 times higher than in 2019 before the pandemic.

The group says that while the effects of the Covid pandemic were significant, the ability of the shipping industry to collectively manage these impacts, and at the same generate profits totalling over $186 billion in 2021, ultimately at the expense of the rest of the supply chain, and ultimately Europe’s consumers, demonstrate that something is wrong. The benefits of the exemptions from general competition law enjoyed by the shipping lines are not being shared fairly between the lines and the rest of the economy, so the Block Exemption should be reviewed urgently.

In their letter the signatories point to the investigations in the US by the Federal Maritime Commission and the passing in May of a new Ocean Shipping Reform Act, addressing many of the grievances of users and services suppliers to the container shipping lines.

The Regulation’s review will allow all interested parties to submit evidence and arguments as to how the Commission should act to ensure the deep-sea container shipping market operates in a way that is fair and transparent to all parties in the maritime supply chain. This should include consideration of new measures and mechanisms and should allow sufficient time for these to be considered and implemented before the expiry of the current regulation in April 2024.

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