EU Abolishes Block Exemption for Liner Consortia

EU Abolishes Block Exemption for Liner Consortia

The European Commission has decided not to extend the ‘Consortia Block Exemption Regulation (CBER),’ a legal framework that automatically exempted liner shipping consortia from EU antitrust rules. This decision comes following a review initiated in August 2022, which identified low or limited effectiveness and efficiency of the CBER, particularly in light of evolving trends in the liner industry.

The CBER allowed carriers to collaborate without the need for a formal waiver from European antitrust laws, provided the partnership’s market share on a trade did not exceed 30%. Initially adopted in 2009, it was subsequently extended in 2014 and 2020. The regulation primarily benefited smaller consortia on a single trade, allowing them to form alliances or collaborations without the costs associated with formal antitrust exemption applications in Brussels.

Notably, major alliances, such as 2M, OCEAN Alliance, and THE Alliance, have never been covered by the block exemption. Instead, they formally applied for and received approval under general EU antitrust law.

The EU will allow the exemption to expire naturally on April 25, 2024.

Cooperation among shipping lines is not outlawed by this decision; carriers operating to or from the EU can still collaborate if they meet the criteria outlined in the EC’s general competition rules, known as the Horizontal Block Exemption Regulation and Specialisation Block Exemption Regulation.

The abolition of CBER is expected to have a minimal impact on the industry, as only a modest number of consortia were still in operation. One such group, the Southern Africa Europe Container Service (SAECS), was among those that benefitted from CBER.

The political necessity for abolishing CBER became evident, as it faced opposition from many forwarders and port operators. They increasingly compete with large, integrated carriers and argued that the exemption created an uneven playing field in the maritime sector.

The EU emphasized that ending the exemption was necessary to restore trust among stakeholders and ensure that the liner shipping sector does not appear subject to less scrutiny than other industries.

Sources: Alphaliner

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