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EC renews Liner Block Exemption

The European Commission has decided to proceed with its planned renewal of the liner shipping consortia block exemption despite vociferous protests from shippers and other supply chain interests.

The exemption, which allows shipping companies to override European Union competition law in order to cooperate in the provision of joint liner services, had been due to expire next month but has now been extended until 25 April 2024.

In its announcement, the commission made no reference to the protests addressed to it by the European Shippers’ Council (ESC), forwarders’ body CLECAT, the European Tugowners’ Association and the Federation of European Private Port Companies and Terminals (FEPORT).

It insisted, however, that its own evaluation of the exemption had shown that it was “still fit for purpose”.

It enabled carriers to obtain efficiencies that allowed them to make better use of vessel capacity and offer customers more connections.

“In that context, those efficiencies result in lower prices and better quality of service for consumers,” it said. “Specifically, the evaluation has shown that in recent years both costs for carriers and prices for customers per TEU have decreased by approximately 30% and quality of service has remained stable.”

The ESC and its fellow transport bodies have already complained that the commission has not been taking account of their arguments. The ESC argued, notably, that the exemption represents a “massive loss for the protection of shippers and customers under European competition law”, while CLECAT noted that other operators in the maritime supply chain did not have an exemption even though they often found themselves in competition with the shipping companies on services.

EU law generally bans agreements between companies that are considered to restrict competition, but the block exemption makes shipping companies an exception to this rule, so long as the combined market share of themselves and their prospective partners does not exceed 30%.The so-called Consortia Block Exemption Regulation was first adopted in 2009 and then prolonged for five more years in 2014.

Andrew Spurrier
European Correspondent

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