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S'pore competition body seeks feedback on extension of shipping block exemption

S'pore competition body seeks feedback on extension of shipping block exemption
The Competition Commission of Singapore (CCS) is calling for public feedback on the extension of a pact among shipping lines for another five years until 31 December 2020.

The Competition (Block Exemption for Liner Shipping Agreements) Order, or BEO, exempts container carriers and operators from prohibitions against anti-competitive agreements in Singapore, allowing two or more carrier operators to jointly provide services in the areas of technical, operational or commercial arrangements and setting freight rates.

The BEO, first issued in July 2006, was extended for five years in 2010 and will expire on 31 December 2015.

CCS said the public consultation seeks views on the possible impact of the proposal on the Singapore economy, in particular on players in the maritime industry such as shippers, port operators, liners and logistics service providers.

The competition watchdog will make a recommendation to the minister for trade and industry after it has considered written submissions from the public.

CCS commented: “Liner shipping agreements enable the connectivity of Singapore’s container port with consequent broader benefits to the Singapore economy, and facilitate cost savings for the liners from economies of scale. These economic benefits are likely to be significant enough to outweigh any anti-competitive effects of liner shipping agreements.”

CCS’s proposal to recommend an extension of the BEO takes into consideration the findings of the CCS-commissioned consultancy study, as well as feedback from CCS’s own consultation with key industry stakeholders.

The Singapore National Shippers’ Council (SNSC), meanwhile, has said it would impress on CCS the need for Singapore to drop the BEO from the Competition Act.

John Lu, honorary president and former chairman of SNSC, said: “Today, all major carriers in the east-west trades are in one of four alliances, a development unprecedented in the liner shipping industry.

“This is cause for concern for shippers as the liner industry is possibly the only industry which enjoys immunity from prosecution under antitrust laws for collective agreements,” he added.

CCS said the public can provide feedback up until noon on 15 June 2015.