Cargo Business Newswire

Wednesday, June 25, 2014

Top Story

EU extends special competition regulation for vessel sharing until 2020

Yesterday the European Commission announced an extension of the consortia block exemption regulation — a framework that exempts certain shipping line alliances from antitrust rules — for an additional five-year period until April of 2020, according to an EC statement.

Under European competition law, the statement said the regulation approves vessel-sharing arrangements between container carriers that have a combined market share of up to 30 percent.

The EC said consortia or joint cargo services at that level usually allow shipping lines to achieve economies of scale. If consortia face sufficient competition and are not used to fix prices or share the market, users of services are usually able to benefit from improvements in productivity and service quality.

The EC's extension of the exemption until April 2020 will provide legal assurance to shipping companies regarding their agreements and compliance with EU competition rules.

The World Shipping Council issued a statement praising the European Commission for continuing to recognize both the benefits of vessel sharing and the importance of the consortia block exemption regulation to those operational agreements.

"Vessel sharing arrangements are an established and essential part of the liner shipping networks that carry the international trade of the European Union and the rest of the world," said Christopher Koch, WSC president and CEO. "Consortia allow carriers to provide their customers with better services at lower cost, with improved environmental performance."

The Commission said it would continue to closely monitor market developments and the conduct of shipping carriers to make sure that markets remain open and competitive.