The European Commission is seeking views from stakeholders regarding the existing exemption of container shipping consortia from European Union antitrust rules that ban anticompetitive agreements between companies.
At present the maritime Consortia Block Exemption Regulation allows shipping lines with a combined market share of less than 30% to enter into cooperation agreements to provide joint cargo transport services. The current block exemption will expire on April 25, 2020.
“Where such consortia face sufficient competition, where they are not used to fix prices nor share the market, their users may benefit from improvements in productivity and service quality,” the EC said in a press release that called for comments on the future regime for liner shipping consortia.
The EC said it has “therefore launched a consultation seeking to collect views from stakeholders to assist the commission’s assessment of the impact and relevance of the Consortia Block Exemption Regulation and to provide evidence for determining whether it should be left to expire or prolonged and, if so, under which conditions.”
Data shows that in the Asia-North Europe trade, the Ocean Alliance of CMA CGM, Casco Shipping, OOCL and Evergreen has a 40% share, the 2M Alliance of Maersk and MSC a 32% share and THE Alliance of Happing-Lloyd, Ocean Network Express and Yang Ming a 26% share.
While carriers share space on alliance ships they also compete vigorously with each other and the industry had an operating loss of US$3 billion last year.
All stakeholders are invited to submit their views on the commission’s consultation website until December 20. The EC said it would also consult the competition authorities of the EU member states.
The Global Shippers Forum said in its latest annual report: “The consequences of market concentration for shippers are fewer services to choose from and reduced competition.”
GSF said it “believes existing competition laws need to be reviewed in response to the changing nature of the container shipping market and regulators may need to adapt or reform their competition and regulatory procedures to ensure that effective competition is maintained to the benefit of shippers and, ultimately, the consumers they serve.”